Asset sale could take much sting out of ailing foreign exchange market, says leading investment banker

„Says the market needs quick solutions to boost confidence given the current reserves position „Urges it has to be done although not a politically most preferred solution

While the reset in the monetary and fiscal policies and, structural reforms such as import substitution and export promotion would provide a medium to long-term fix to the current external sector woes confronting the Sri Lankan economy, a quick fix could come from an asset sale which would infuse a couple of billions dollars, instantly boosting market confidence, according to an investment banker.

According to Senaka Kakiriwaragodage, the Chief Executive Officer at NDB Capital Holdings Limited, a sale of public assets in return for a couple of billions worth of dollars would quickly strengthen the depleted foreign reserves in the country while instilling the much needed confidence in the domestic foreign currency market.

“One other solution I would like to add probably is some form of asset sale because the market needs quick solutions given the current situation,” Kakiriwaragodage said last week speaking at the September edition of Postgraduate Institute of Management’s online forum, which was dedicated to discuss about the current foreign exchange situation in the country and the way out.

“I think probably you need to shore up that reserves position by

a couple of billion dollars. I think it will infuse a lot of confidence to the market,” he added.

Sri Lanka at present is facing the most acute shortage of foreign currency in its recent history due to drying up of key foreign exchange inflows from tourism, direct investments and easing of merchandise exports caused by pandemic-induced disruptions.