Sri Lanka rupee depreciated against US dollar by 15-pct this year

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Nov 29, 2018 (LBO) – Sri Lankan rupee has depreciated against the US dollar by 15.1 percent during the year up to date reflecting a broad-based strengthening of the dollar globally, outflows from the government securities market and demand for import expenditure in the foreign exchange market.

The Central Bank today said the rupee has also depreciated against other major currencies during this period reflecting cross-currency movements.

Sri Lankan rupee which depreciated against the US dollar by 5.3 percent in the first eight months of the year, showed a further depreciation of 4.6 percent in September, reflecting the pressure on the domestic foreign exchange market.

The Central Bank said these developments necessitated intervention by them to curtail excessive volatility in the exchange rate.

According to Central Bank latest statistics, as at end September 2018, gross official reserves were estimated at 7.2 billion US dollars, equivalent to 3.8 months of imports.

Total foreign assets, which consist of gross official reserves and foreign assets of the banking sector, amounted to 9.6 billion dollars as at end September, equivalent to 5.1 months of imports.

The government securities market continued to experience a withdrawal of foreign investments thus raising the net cumulative outflow to 468 million dollars by the end of the first nine months of this year.

The CSE recorded a net inflow of 37 million US dollars in the first nine months which comprised an inflow of 73 million dollars to the primary market and a net outflow of 36 million dollars from the secondary market.

Tourist arrivals during the first nine months have shown an 11.6 percent increase over the corresponding period of 2017. Earnings from tourism amounted to 3,212 million dollars during the first nine months.

Workers’ remittances have declined by 1.5 percent to 5,277 million dollars during the first nine months in comparison to the corresponding period of 2017.