Lanka receives RBI's remaining US$ 1.1 b

Indunil Hewage

Sri Lanka received the remaining proceeds of US dollars 1.1 billion under the currency swap arrangement with the Reserve Bank of India (RBI), Central Bank of Sri Lanka Deputy Governor Dr. P. Nandalal Weerasinghe told Daily News business. He said that the currency swap agreement signed between RBI and Central Bank of Sri Lanka will boost official reserves.

In April, 2015, Sri Lanka obtained US dollars 400 million under this arrangement to boost official reserves.

Gross official reserves, which stood at US dollars 7.5 billion at end June 2015 are estimated to have decreased to US dollars 6.8 billion end July 2015.

Central Bank in its monthly monetary policy announcement, earlier this week said that the official reserves are however expected to increase during the remainder of the year.

This is with higher inflows arising from improved business outlook and investor confidence along with the realisation of the remaining proceeds of the currency swap arrangement with the Reserve Bank of India (RBI) amounting of US dollars 1.1 billion and long term financial flows to the government , including the planned term loan of US dollars 500 million will boost official reserves.
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Sri Lanka’s new Finance Minister says won’t allow artificial devaluation, high interest rates

Author ANUSHIKA KAMBURUGAMUWA

(LBO) – Sri Lanka’s newly appointed Finance Minister Ravi Karunanayake says an artificial devaluation of the rupee will not be allowed, and he will push for low interest rates in the future.

“There are realistic situations in the world we have got to face today, but that does not mean that we will artificially devalue the rupee,” Karunanayake said. “It was only to show that we are not blind to external forces.”

The Central Bank gave the rupee freedom to float on Friday, with reduced intervention, and by not indicating a daily reference rate. As a result the rupee depreciated to 137.50/138.00 on Friday from 134.75 on Thursday.

“We will be moving forward from today proactively, ensuring what we mentioned earlier. Reducing interest rates and ensure strengthening the rupee and moving forward.”

“Every rupee devaluation has a 40 billion rupee impact to the economy. The only way that you can survive is if you reduce the interest rate,” he said.

“There is more than 10 -12 billion dollars out there. We are trying to get that money back to the country,” he said.

“We will ensure we make the country a nice destination for investments and through that we will ensure the benefit will go down to the people of this country.”

“We will take the challenge from now on.”