CBSL determined to curb unwarranted depreciation of the rupee

COLOMBO (News 1^st) - In a move to prop up the weakening rupee, the Central Bank released a notice saying it's determined to curb unwarranted depreciation of the rupee as the currency touched 159 against the US dollar in mid-day spot trading today (May 17). The notice which appeared in mainstream daily newspapers said that underlying fundamentals do not warrant the current pressure on the Sri Lankan rupee. "Gross external reserves are presently at a healthy USD 9.1bn and the real effective exchange rate indices indicate that the currency is competitive."The pressure on the currency is, therefore unwarranted," the Central Bank said. The notice said inflows expected from the IMF, Hambantota port and the 1bn USD syndicated term loan will boost reserves to 11bn USD by mid-June 2018. The Central bank said it has the option of using a part of its unprecedented large external reserves to trigger a material appreciation of the rupee to prevent unwarranted depreciation of the currency.