The ongoing depreciation of the Sri Lankan rupee against the US dollar can be managed through planned financial inflows and policy measures, Cabinet spokesperson Minister Vijitha Herath said at the weekly Cabinet media briefing on Monday.
Herath said the government expects around US$ 700 million from the International Monetary Fund in the near future — matching the $700M-by-May 27 disbursement window flagged by Central Bank Governor Nandalal Weerasinghe — together with a further US$ 200 million from the Asian Development Bank. Those inflows would bring additional foreign exchange into the country, he said, while import restrictions would help reduce dollar outflows and exchange-rate movements were expected to improve export earnings.
The Minister acknowledged that the weakening rupee could lead to higher prices for imported goods, creating potential inflationary pressure across the economy. Taking those factors into account, however, the government believed the situation could be effectively managed going forward, he added.
The Cabinet briefing follows a sharp run of currency moves last week, including People’s Bank quoting a record Rs. 340.67 dollar selling rate and EconomyNext reporting that the interbank spot quote ended at Rs. 339.50 on the same day. Deputy Finance Minister Anil Jayantha Fernando earlier told Parliament the rupee had lost about 4.8% on the dollar since the start of the year, a depreciation he said remained shallower than India, Nepal and Indonesia. Governor Weerasinghe used the same regional comparison framing on Monday.
Source: Ada Derana.
