Sri Lanka rupee strengthens below 110 to greenback

Apr 28, 2011 (LBO) – Sri Lanka’s rupee strengthened to below 110 to green back as the dollar slid to record lows against currencies issued by other monetary authorities with higher interest rates, dealers said. The spot dollar was quoted around 109.90/95 in mid morning trade. The Australian dollar, rose to a 29-year high against the US dollar at 1.09, and the Euro hit a 17 month high above 1.48.

The dollar has been sliding against other paper currencies and real commodities, with gold now around 1,500 US dollars an ounce.

Dollar pegged countries have been hit by high inflation as commodity prices including food and energy rose. The dollar weakened further as Fed chief Ben Bernanke said he would continue exceptional money printing activities until June.

“The trade-offs are getting — are getting less attractive at this point,” he said.

Fed chief Bernanke maintains that volatile food and energy prices are not ‘inflation’.