Ten percent of the Lanka’s reserves have been drained so far, as the Central Bank tries to defend a weak rupee.

Ten percent of the country’s reserves have been drained this year as the Central Bank intervened in the market to defend the Rupee, which is on a steady slide against the US dollar. Ten percent of the country’s reserves have been drained this year as the Central Bank intervened in the market to defend the Rupee, which is on a steady slide against the US dollar. Over Rs. 225 million of the official reserves have been used up for intervention in the foreign exchange market to minimize volatility.

A large chunk of this money, around US$ 150 mn, have been used up since April, after the UPFA government took office and the rest during the political and economic uncertainty during the run up to the elections.

Official reserves are down ten percent to Rs. 2.1 billion from Rs. 2.3 billion at the beginning of the year.

Over two thirds of this money was spent during the last three months after the UPFA formed a government without a majority in Parliament.

About US$ 75 million was spent on intervention in the first quarter but the intervention doubled in the next three months to US$ 150 million depleting the reserves.

The interventionist trend is in stark contrast to the net pur