The gap between the curb market and official exchange rates has declined notably in recent weeks, and the gap is expected to remain narrow in the period ahead, said a spokesman for the Central Bank at its monetary policy media briefing last week.
The exchange rate remains broadly stable within the market guidance that commenced from mid-May this year, the spokesman said. Central Bank Governor Dr. Nandalal Weerasinghe said improved forex liquidity and securing of sizeable financing assistance has helped availability and distribution of essential commodities, such as fuel, cooking, medicine, and fertiliser.
Arrangements are in place to secure a continuous supply of such essential commodities in the period ahead, he said.
However, inflation according to the regulator is expected to be elevated up to September and thereafter trend down.
Inflation could be in the range of 60-65 percent in the month ahead which is not as bad as we expected. Expectations were that inflation would hit the 70 percent mark, the Governor said. The economy is projected to contract by over 7.5 percent this year according to the Governor who seemed upbeat about conditions improving in 2023. Global economic growth is estimated to moderate to 3.2 percent in 2022 from 6.1 percent recorded in 2021.