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Sri Lanka beware of foreign exchange risk

Views:614     Publish Time: 2022-04-26 10:02:54      Origin:Site Inquire

According to foreign media reports, Sri Lankan President Gotabaya Rajapaksa declared a state of emergency in the country on April 1. Sri Lanka is mired in its worst economic crisis in decades, facing severe shortages of foreign currency and fuel and other necessities.


Sri Lanka, a country of 22 million people, is dealing with a severe foreign exchange crisis that has devalued the country's currency and affected the supply of basic commodities such as food, medicine and fuel. The government is struggling to secure foreign currency to pay for fuel and other vital imports.


Sri Lanka is facing a huge debt load and dwindling foreign exchange reserves, and the country is struggling to pay for imported goods, which has led to a lack of basic supplies. For weeks, residents were forced to queue for hours to buy essential supplies and faced rolling blackouts of up to 13 hours a day because there wasn't enough fuel to run the power plant while dry weather weakened water power. ability to generate electricity.

Laugfs Gas LGGL.CM, which ordered cooking gas, was unable to get $4.9 million in payments from local banks due to a severe shortage of foreign exchange, and a vessel carrying 5,500 metric tons of gas had to leave Sri Lankan waters.


The Sri Lankan government said it was seeking a bailout from the International Monetary Fund and loans from India and China. Indian traders have loaded 40,000 tonnes of rice, the first large-scale food aid from India since Colombo received a line of credit from New Delhi.


However, coincidentally Lebanon's Deputy Prime Minister Saadeh Al-Shami announced that Lebanon and its central bank have gone bankrupt.


And Lebanon's central bank governor Riad Salameh released a statement after the deputy prime minister's remarks denying the bank had gone bankrupt and saying the losses "are being processed."


Salameh said: “Despite the losses in the Lebanese financial sector, which the Lebanese government is currently working on with the International Monetary Fund to develop an economic recovery plan to deal with these losses, the Lebanese Central Bank has a role and will continue to do so.”


The situation in Lebanon cannot be ignored, so bank withdrawals are not open to everyone. Due to the ongoing economic crisis, foreign currency cash withdrawals in Lebanon have been severely restricted since 2019.


According to the relevant regulations, "bankruptcy" means that the government is unable to pay debts and interest as they come due. Among them, one of the reasons for the bankruptcy of a country is a lack of liquidity, when a country is temporarily unable to repay its debts and pay interest due to its inability to liquidate its asset base quickly, it may declare “bankruptcy”. However, members of the Lebanese Economic and Social Council said in an interview: "Although Lebanon has [really] faltered in repaying its debts, it is not yet a bankrupt country".


Regarding the current social and economic situation in Lebanon, some buyers' production and business activities are affected by social unrest in the country and the shortage of domestic dollars, resulting in payment arrears. Coupled with the current Russian-Ukrainian conflict and the global epidemic, the tourism industry, which is Lebanon's main source of foreign exchange income, has been further affected.


It is expected that business risks will further increase as the multiple political and economic situations in Lebanon continue to deteriorate. Especially in the current situation where the Lebanese exchange rate has plummeted, the local currency has depreciated, and the economy is facing high risks, importers are likely to use this loophole to damage the interests of suppliers due to cost pressures. Good risk control, beware of risks such as abandonment and non-payment by buyers at the destination port, so as to avoid losses caused by the loss of money and goods.


Changes happen all the time , as foreign trade representative we should pay more focus on the news to win the trading game.


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Kexun cable, a cable company with exporting more than 20years to world . A factory you can believe. If you need cables , you can buy from us. Every year exporting 1000 containers to the world. At present, the company's products have a number of international and domestic quality certification certificates, like CE, ROHS, CPR, ISO9001 etc.


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We have 3 factories, one produces the cables, one produces the inner conductor, another one produces the PVC jacket, and also we importing PE from Japan, Saudi, Taiwan etc, so we have the competitive prices in China.  


And we export our products for over 20 years, we have professional team for the export and document paper work.  


We sure our competitive prices, good quality, advanced service will help you to occupy the market in your country.


The company adheres to the tenet of "do everything possible to produce products that meet customers in order to benefit the company's economic booming. We believe that the company will never stop exploring and developing, and keep pace with China's domestic and world international companies.


So if you are interested in our coaxial cables, just come back to me for any needs.

Foshan Kexun Cable Industrial Co., Ltd.
Tel :+86-757-85225523
Tel: +86-13929926684
Fax : +86-757-85225512
Add : No.6, Zhiye Road, Songxia Industrial Park, Songgang, Shishan Town, Nanhai District, Foshan City, Guangdong, China. 528234

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