Rupee depreciation pressure experienced during past few days to be short-lived: Central Bank

Aug 23, 2019 (LBO) – Sri Lanka’s Central Bank expects the rupee depreciation pressure experienced during the past few days, to be short-lived.

The Sri Lankan rupee appreciated against the US dollar by 2.4 percent so far during the year, although some depreciation pressure was experienced recently.

The Central Bank said the depreciation pressure, mainly driven by foreign withdrawals from the Government securities market by a few investors, is expected to be short-lived.

Foreign financial flows, in the meantime, have been mixed with a net outflow from the Government securities market and a net inflow to the stock market, including primary inflows, thus far during the year.

Meanwhile, gross official reserves are estimated at 8.3 billion US dollars at end July 2019, providing an import cover of 5.0 months.

“The trade deficit continued to improve during the first half of 2019 with the sustained growth of exports and the notable contraction in the growth of imports,” the Central Bank said.

Tourist arrivals, which were impacted by the Easter Sunday attacks, continued to recover from the month of June.

“Workers’ remittances recorded a marginal growth in June, although a cumulative moderation was observed during the first half of the year.”