Sri Lanka’s central bank has devalued the Rupee and says it expects that it would be at not more than 230 Rupees per US Dollar. The decision was followed by opinion by number of experts including review team of the International Monetary Fund.
Central Bank maintained 200 to the US dollar peg after printing money and it has paved way to reduction of foreign currency inflows , high inflation and related complexities.
The central bank said in a release that greater flexibility in the exchange rate will be allowed to the markets with immediate effect. The Bank is also of the view that forex transactions would take place at levels which are not more than Rs. 230 per US dollar.
Read the full media release.
Considering the severity of the external shocks and recent developments in the domestic front, the Monetary Board of the Central Bank of Sri Lanka announced a comprehensive policy package on 04 March 2022 with the view to counter such economic headwinds. The Central Bank also indicated that it will continue to closely monitor the emerging macroeconomic and financial market developments, both globally and domestically, and will stand ready to take further measures as appropriate, with the aim of achieving stability in the fronts of inflation, the external sector, the financial sector, and real economic activity.
In that context, greater flexibility in the exchange rate will be allowed to the markets with immediate effect. The Central Bank is also of the view that forex transactions would take place at levels which are not more than Rs. 230 per US dollar.
The Central Bank will continue to closely monitor the developments in the domestic foreign exchange market and make appropriate policy adjustments accordingly.
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