Rupee depreciated 15.9% in 2018

Colombo (News1st): The Sri Lankan rupee has depreciated to an all-time low once again. The rupee was selling at 184.0758 against the dollar. According to the Central Bank's Monetary Policy Review: No. 8 of 2018, the Sri Lankan rupee depreciated by 15.9% against the US dollar thus far (up to 27 December) during 2018. The trade deficit widened further in the first ten months of 2018 with the expansion in import expenditure outpacing the growth of export earnings. Both the government securities market and the Colombo Stock Exchange experienced net outflows of foreign investment. Sri Lanka's gross official reserves, which stood at 8.4 billion US dollars by the end of July, have declined to the 7 billion US dollar. As per the provisional estimates of the Department of Census and Statistics (DCS), the Sri Lankan economy recorded a modest real GDP growth of 2.9%, year-on-year, during the third quarter of 2018, compared to the revised growth of 3.6% in the second quarter of 2018. The report states that the real GDP growth is likely to be low in the fourth quarter of 2018 as well. The Monetary Board of the Central Bank was of the view that it is appropriate to continue the current monetary policy stance to stabilize overall economic conditions. Accordingly, the Monetary Board decided to maintain the Standing Deposit Facility Rate (SDFR) and Standing Lending Facility Rate (SLFR) of the Central Bank at their current levels.