Weak dollar cause for rupee rise – CB Chief

By Deepal V. Perera

Central Bank Governor Nivard Cabraal yesterday declared that a weakening US Dollar was forcing the Rupee to appreciate.

“Currently the Sri Lankan Rupee is seen appreciating against the dollar, mainly due to the fact that the US dollar has weakened. This has nothing to do with the country’s economic performance, but is reflection of a weakening of the dollar, where most of the currencies in the region such as the Indian Rupee and Bangladesh Taka are also experiencing similar situations,” Cabraal told the Daily FT.

He also said that the inward remittances for the year also indicated an upward trend, showing a 12% growth over last year.

“Last year we had a good remittance record, with a growth of 14%. This year so far we have seen remittances increasing by only 12%, which is still a good figure but we hope to see total remittances settling at the US$ 4 billion mark at the end of the year,” he said.

The Governor also revealed that a new exchange liberalisation package would be announced in the third week of October, offering a fair amount of relaxation of the country’s exchange control policy.

“The new package would be announced in the third or fourth week of this month offering some relaxing of the rules,” said Governor Cabraal, who however declined to reveal specific details.