Sri Lanka rupee weakens to new low against the US dollar in forex markets
ECONOMYNEXT – Sri Lanka’s rupee weakened to a new historic low of 139.20/30 rupees against the US dollar in the spot forex market, dealers said, amid excess liquidity in money markets, down from 138.90/05 yesterday.
Last Friday the Central Bank attempted to ‘float’ the rupee.
Sri Lanka’s domestic credit has risen sharply over the past year as borrowings from the domestic markets increased to finance the budget deficit, as private credit also picked up.
Analysts have been warning for over eight months that Sri Lanka was heading for balance of payments trouble due to record low interest rates amid expanding state spending. (Colombo/Sept11/2015)