Adequate steps are being taken by the central bank to further strengthen and defend the Sri Lanka rupee against the Dollar and the current rate is likely to be maintained further, Governor of Central Bank Dr. Nandalal Weerasinghe said.
He was addressing the National Law Conference 2023 under the theme ‘NAVIGATING THROUGH CRISIS –THE LAW’S ROLE’ that began at Colombo yesterday and concludes today.
He said that it was the re-introduction of the flexible exchange rate and other instruments that paved the way for this. “This was introduced at a time when the economy was recovering and this is why it became a success and now market sources determine the price of the dollar.” The governor said that the dollar was suppressed by the central bank earlier but that decision was very wrong because the country’s situation was not suitable for such a move at that juncture of time. “If I was the Central Bank governor at that time I would never have allowed this decision.”
Dr Weerasinghe recalled that there was a time when people including professionals and exporters used to buy dollars and stock then anticipating the dollar to move to around Rs. 400 plus. Remittances were channelled through non-banking means which saw them get around Rs. 40 more than the stipulated price. The Governor said that however, with the country’s economic situation improving, they gave a grace period of a few months ago for people and professionals to bring out the hidden dollars back to the market.
“We also made this appeal to exporters as well as professionals and said that we would not even ask how these dollars were earned. However, they kept the dollars under their mattresses and overseas, anticipating the dollar to move up further and now they have understood their mistake and are selling their dollars in the local market.”
He said that when they made this offer only around USD 30 million came to the market but today with the rupee strengthening over USD 500 million has suddenly come to the market.
