Sri Lanka rupee may strengthen with foreign cash inflows for election: CB Governor


June 6, 2015 (LBO) – Sri Lanka’s rupee may strengthen supported by foreign inflows to finance an upcoming general election in September this year, Central Bank Governor Arjuna Mahendran told reporters recently.

Mahendran said this in reply to a question raised by a journalist about the prediction made by Finance Minister Ravi Karunanayake on 23rd of June that the government will strengthen the rupee to 129/130 against the US dollar in two weeks.

“I think the Honourable Minister of Finance may be knowing something that you don’t,” Mahendran told reporters in Colombo.

“I am sure he is expecting some large volumes of funds to come into the country which is not an unusual expectation particularly ahead of an election of the country,”

“Because as you know politicians have to spend a lot on the election campaign and presumably they will have lots of overseas donors who will be sending money in the coming weeks,”

“I hope it will come soon. If it happens the rupee will appreciate, helping with debt service costs,”

“I can’t personally or on behalf of the central bank vouchsafe that that will happen. But let’s hope it does.”

Sri Lanka’s rupees has depreciated against the US dollar by around 2 percent by July 2015, Central Bank data showed.

From the beginning of May 2015, rupee depreciated against the US dollar by 0.4 percent to 133.60 rupees.