US$ 5 billion released in three years to halt Rupee slide | Sunday Observer

US$ 5 billion released in three years to halt Rupee slide

12 March, 2023

The Sri Lanka Rupee has strengthened in recent weeks as foreign exchange earnings have increased, said Transport, Highways and Mass Media Minister Dr. Bandula Gunawardena.

Minister Dr. Gunawardena said the Rupee’s strength has not been derived from selling US Dollars, as was the case previously.

The Rupee has gained strength due to increased tourist arrivals, remittances from Sri Lankan migrant workers, and parties who held US Dollars for speculative gains being forced to sell them in the open market, Minister Dr. Gunawardena said.

The exchange market’s belief that the Rupee will gain once Sri Lanka receives the International Monetary Fund (IMF) Extended Fund Facility (EFF) has also contributed significantly to its rise over the past few days.

Accordingly, the Rupee hovered around the 311 mark against the US Dollar (buying rate), according to the rates quoted by the Central Bank of Sri Lanka (CBSL) on its website. The Rupee also performed well against other world currencies, at 327 to the euro, 370 to the British Pound, 229 to the Canadian Dollar, 203 to the Australian Dollar, 2.2 to the Japanese Yen, 3.8 to the Indian Rupee, 343 to the Swiss Franc and 1,033 to the Kuwaiti Dinar, the world’s strongest currency, as quoted by currency exchange sites.

The Central Bank of Sri Lanka (CBSL) had intervened aggressively in the foreign exchange market to stop the Rupee’s sharp depreciation in the subsequent years.

The CBSL had sold Dollars from its foreign exchange reserves to provide liquidity to the market.

The Central Bank of Sri Lanka released US$ 3,253 million for sale in the exchange market during this period, its net foreign exchange sales amount.

A sum of US$ 768 million was released later.

The CBSL released US$ 1,112 million into the market in 2012 as net foreign exchange sales to determine the exchange rate.

These figures were publicised at a news briefing held last week.