Sri Lanka rupee to be steady; rates to fall later: FinMin

ECONOMYNEXT – Sri Lanka’s rupee will be steady at current levels, and interest rates will ease as economic conditions strengthen Finance Minister Ravi Karunanayake said.

He said the rupee is expected to remain at current levels.

"We will ensure that there is a lot of FDIs (foreign direct investments) coming in. Inflows will come in and maintain the rupee at this level," Karunanayake told member of Sri Lanka’s Foreign Correspondents’ Association.

Sri Lanka’s rupee collapsed in 2015 as the central bank printed money to finance a deficit and keep interest rates down as a budget deficit expanded.

However policy has now been tightened. A currency weakens or strengthens due to monetary policy.

Karunanayake said he would like interest rates to fall, but it will happen gradually as economic conditions improved.

He said the 2015 budget deficit may be slightly better than the original 5.4 percent target. In 2017, a 4.7 percent target is planned. (Colombo/Oct28/2016)

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