Sri Lanka’s new Finance Minister says won’t allow artificial devaluation, high interest rates

Sep 04, 2015 (LBO) – Sri Lanka’s newly appointed Finance Minister Ravi Karunanayake says an artificial devaluation of the rupee will not be allowed, and he will push for low interest rates in the future.

“There are realistic situations in the world we have got to face today, but that does not mean that we will artificially devalue the rupee,” Karunanayake said. “It was only to show that we are not blind to external forces.”

The Central Bank gave the rupee freedom to float on Friday, with reduced intervention, and by not indicating a daily reference rate. As a result the rupee depreciated to 137.50/138.00 on Friday from 134.75 on Thursday.

“We will be moving forward from today proactively, ensuring what we mentioned earlier. Reducing interest rates and ensure strengthening the rupee and moving forward.”

“Every rupee devaluation has a 40 billion rupee impact to the economy. The only way that you can survive is if you reduce the interest rate,” he said.

“There is more than 10 -12 billion dollars out there. We are trying to get that money back to the country,” he said.

“We will ensure we make the country a nice destination for investments and through that we will ensure the benefit will go down to the people of this country.”

“We will take the challenge from now on.”