Treasury Secretary dismisses speculations of exchange control limits, says rupee to stabilise at 102 to the US dollar

Treasury Secretary Dr. P B Jayasundara dismissed market talk of exchange control limits, saying that foreign inflows are on target to stabilise rupee at 102 to the US dollar. Treasury Secretary Dr. P B Jayasundara dismissed market talk of exchange control limits, saying that foreign inflows are on target to stabilise rupee at 102 to the US dollar. He said speculation was the main reason for the rupee’s volatility, which has slipped by nearly seven percent to the greenback so far this year.

“Markets should be mature enough to figure out all these kinds of speculations. I repeat there are no exchange control restrictions. After the subsidies are gradually phased out things should be okay,” Jayasundara told members of the Ceylon Chamber of Commerce on Monday.

The rupee ended at 103.03 against the dollar from an intraday high of Rs. 102.98.

“The pressure on the exchange rate will ease off, we are not going to increase our domestic borrowing programme, while we have got a US$ 150 mn credit line from India at LIBOR plus half a percent. So I don’t see a need for any speculation and the Central Bank will step in wherever necessary,” he said.

The Central Bank has be