Depreciation of LKR far less than other Asian countries: Mangala

Although much has been said about the recent depreciation of the currency, the Sri Lankan Rupee has depreciated by 3.3%, much less than other Asian countries, Finance and Media Minister Mangala Samaraweera said.

“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%”, the Minister added.

The Minister made these remarks at the AGM of the Ceylon Chamber of Commerce held yesterday (28).

Samaraweera further said that the government is of the view 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 said.

Amidst a turbulent global economic environment with disruptions in global interest rates, oil markets, geopolitical security concerns in the Middle East, and political turnover in Europe, Sri Lanka’s economy has been navigated into calm waters.

“The focus of the Ministry of Finance, the Central Bank, and other economic bodies in government has been on macroeconomic stabilization over the past 3 years. Inflation has declined to 2.1% in May 2018, a manifestation of concerted efforts to bring down the cost of living. Interest rates have moderated as the prime lending rate has declined by over a 100 basis points in the last 12 months. Today’s Prime Lending Rate (PLR) has dipped below 11%. Sri Lanka’s official reserves have reached comfortable levels of US$ 9.9 billion by end April”, the Minister said.