Mangala Says depreciation Of Sri Lankan Rupee Due To 'External Factors': "All Emerging And Frontier Markets Affected"

Finance and Media Minister Mangala Samaraweera said the depreciation of the Sri Lankan rupee was mainly due to external factors.  

Addressing a Chamber of Commerce event in Colombo, Samaraweera said, "The policy of this government is that the currency should be determined by market forces. The recent depreciation of the Rupee is due to external factors, particularly the rise in policy interest rates in the United States. This has affected all emerging and frontier market economies all over the world."

He also added, "Whilst the Sri Lankan Rupee has depreciated 3.3% this year, the Indian Rupee has depreciated by 8%, the Pakistani Rupee by 10.5%, Indonesian Rupiah by 5.2%, and Thai Bhat by 5.4%. In fact in the last couple of days the Sri Lankan Rupee has appreciated slightly as macroeconomic fundamentals do not warrant a serious depreciation of the currency."

"The government is acutely aware of the need to drive near term domestic economic activity. We must be mindful of doing so without upsetting the delicate economic balance so as to not jeopardize our ability to meet the demanding external debt repayments."

The Finance Minister also said the government had designed a multi-pronged strategy to stimulate near term economic growth. The key component of this strategy, he said, is Enterprise Sri Lanka, the recently launched loan scheme for Sri Lankan businesses and industries. 

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