June 14, 2013 (LBO) – A weakness in Sri Lanka’s rupee is a “logical adjustment” coming amid falling Asian currencies including the Indian rupee and Japanese Yen that will also ward off import pressure, Central Bank Governor Nivard Cabraal said. “There are different ways of looking at this,” Cabraal said. “The Indian rupee has weakened significantly.
“The Japanese yen has also weakened considerably. The weaker it gets (Yen/India rupee) there is a tendency for people to import as well.
“This seems to be a logically adjustment which is not unusual.”
The rupee was quoted as low as 129.05 in morning trade Friday and later recovered to 128.50/80 levels.
The underlying strength of the US dollar had increased in recent months, which is shown in falling oil and gold prices, indicating that currencies that are not tightly pegged to the US dollar could also weaken.
Most Asian currencies have fallen against the US dollar.
In some countries there have been bond sales by foreign investors amid higher US interest rates.
Governor Cabraal said there were no unusual bonds sales by foreign investors. Sales are usually offset by purchases by others and the ceiling of 12.5 percent was generally mainta