Sri Lanka rupee to be depreciated 3-pct: Update

Nov 21, 2011 (LBO) – Sri Lanka will depreciate the rupee 3.0 percent to help export competitiveness, President Mahinda Rajapaksa told parliament in his budget speech for 2012. “Countries that are competing with us have depreciated their currencies,” President Rajapaksa said.

“To correct this disadvantage, as an incentive to exports I intend to depreciate the currency by 3.0 percent.”

Central Bank Governor Nivard Cabraal said the rupee will be depreciated from tomorrow
The rupee is pegged to the US dollar and traded around 110.20 on Monday.

Forex markets briefly halted trading as they awaited direction, dealers said.

Tentative quotes were offered around 113.70/114.0 rupee but there were no trades.

The rupee has come under pressure for several months data released Monday showed that net net reserves had fallen 860 million dollars in September, though other data indicated reduced interventions in the following months.