Rupee down 15.5% so far this year

The rupee has depreciated by 15.5% against the dollar during the year up to 21 December, the Central Bank revealed. 

“The weakening of the rupee against the dollar mostly reflects a broad-based strengthening of the dollar globally, outflows from the government securities market, and demand for import-related payments in the foreign exchange market,” it added. Central Bank also said, reflecting cross-currency movements, the rupee depreciated against other major currencies during this period as well. 

Between January and October, the rupee depreciation was 12.3%. The major inflow to the financial account during October was a foreign currency term financing facility of $ 1 billion obtained by the Government. However, the trend of foreign investments outflows from the financial account continued during October, with notable outflows from the Colombo Stock Exchange (CSE) and the government securities market.

Central Bank said the government securities market recorded a net outflow of $ 172 million in the month of October, thus raising the net cumulative outflow to $ 640 million by the end of the first 10 months of 2018.

Foreign investments in the CSE, including both secondary and primary markets, recorded a net outflow of $ 36 million during the month of October. On a cumulative basis, the CSE recorded a net inflow of $ 1 million in the first 10 months of 2018, which comprised an inflow of $ 77 million to the primary market and a net outflow of $ 76 million from the secondary market.

Gross official reserves were estimated at $ 7.9 billion, equivalent to 4.2 months of imports as at end October. Total foreign assets, which consist of gross official reserves and foreign assets of the banking sector, amounted to $ 10.4 billion at end October, equivalent to 5.5 months of imports.