Sri Lanka rupee weakens against Euro helping exporters: Central Bank

Oct 30, 2009 (LBO) – The Sri Lanka rupee has weakened against the Euro and Sterling since November 2008 increasing the edge of exporters to Europe and helping offset a possible hit from lost trade concessions, Central Bank Governor Nivard Cabraal said. “It is our contention that Sri Lanka’s exporters’ competitiveness to the European Union had increased sharply since November 2008,” Cabraal told reporters Thursday.

Sri Lanka is facing the prospect of losing preferential access to the European market next year following an adverse report over non-compliance with conventions on civil and political rights of Sri Lankan citizens, weak rule of law or impunity and human rights abuses.

The Central Bank said a duty concession available to some 7,000 goods exported to the EU was around 7.0 percent. For apparel exports the value of the concession was about 78 million Euros the Central Bank said, referring to EU data.

The Central Bank said the rupee had depreciated by 18.5 percent against the Euro from November and 14.0 percent against Sterling.

The Sri Lanka rupee is pegged to the US dollar and other dollar pegged countries, such as China, in the so-called pegged zone would also get a similar benefit.

But assistant governor Nandalaal We