Sri Lanka rupee move will improve confidence: Finance Minister

ECONOMYNEXT – Changes to Sri Lanka’s foreign exchange markets Friday will improve confidence and showed that external pressures were being taken stock, newly appointed Finance Minister Ravi Karunanayake said.

He said the rupee will strengthen in the future with more investments coming in.

Sri Lanka’s Central Bank ended giving direction to the forex market by indicating a daily reference rate, from Friday, allowing market participants to trade the US dollar in the interbank market.

"It was only to show that we are not blind to external forces," Karunanayake told reporters at the Finance Ministry shortly after he was appointed.

"We will have confidence brought into the economy."

After an early quote at 136.00/139.00, quotes narrowed to 136.50/75 to the US dollar and the spot rupee was traded weaker. There was interventions from a state bank at 139.00 levels and the rupee started to recover towards, 138.00.

Sri Lanka rupee closed at 137.50/138.00 levels Friday, down from 134.75 on Thursday in the first day when interventions were reduced.

Significant exporter selling has not yet come to the market.

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