The opening of the Bank of Ceylon's overseas branch in the Seychelles was a very productive and timely move by the bank Chairman, Air Chief Marshal, Harsha Abeywickrama said.
Speaking at the launch of the first structured derivative product by launching Sri Lankan Rupee Currency Options by Bank of Ceylon he said that there are over 5,000 Sri Lankan's employed in the Seychelles and in addition there are several Lankan based business establishments in the country.
It was also disclosed that over 1,500 new accounts had been opened by foreigners justifying the opening of the bank. The Chairman also said that even the Mihin Air operations too are successful as it's a profitable route.
To coincide with the 75th Anniversary celebrations of the Bank, BOC Treasury Division has launched this in-house developed, custom made, structured derivative solution to one itís long standing corporate clients Sierra Cables PLC.
Derivative instruments are relatively new to the Sri Lankan market though they are very popular financial instruments in other parts of the world designed primarily to hedge foreign exchange risk, interest rate risk and commodity price risk. Derivatives are extensively used by financial institutions, corporates, hedge funds and individuals to hedge their risk exposure to avoid adverse consequences on their asset portfolios caused by volatility of market risk factors.
This will allow us to transfer exchange rate risk to the bank and at the same time have greater flexibility on the market rates than the traditional forward exchange contract, said W. A. P. Perera, Chairman Sierra Cables.
Introducing Lanka Rupee currency option is another step in the right direction, encouraging clients to think beyond traditional foreign exchange risk hedging mechanisms, said P. A. Lionel Senior Deputy General Manager, International, Treasury and Investment.