AIRLINK 74.64 Decreased By ▼ -0.21 (-0.28%)
BOP 5.01 Increased By ▲ 0.03 (0.6%)
CNERGY 4.51 Increased By ▲ 0.02 (0.45%)
DFML 42.44 Increased By ▲ 2.44 (6.1%)
DGKC 87.02 Increased By ▲ 0.67 (0.78%)
FCCL 21.58 Increased By ▲ 0.22 (1.03%)
FFBL 33.54 Decreased By ▼ -0.31 (-0.92%)
FFL 9.66 Decreased By ▼ -0.06 (-0.62%)
GGL 10.43 Decreased By ▼ -0.02 (-0.19%)
HBL 114.29 Increased By ▲ 1.55 (1.37%)
HUBC 139.94 Increased By ▲ 2.50 (1.82%)
HUMNL 12.25 Increased By ▲ 0.83 (7.27%)
KEL 5.21 Decreased By ▼ -0.07 (-1.33%)
KOSM 4.50 Decreased By ▼ -0.13 (-2.81%)
MLCF 38.09 Increased By ▲ 0.29 (0.77%)
OGDC 139.16 Decreased By ▼ -0.34 (-0.24%)
PAEL 25.87 Increased By ▲ 0.26 (1.02%)
PIAA 22.20 Increased By ▲ 1.52 (7.35%)
PIBTL 6.80 No Change ▼ 0.00 (0%)
PPL 123.58 Increased By ▲ 1.38 (1.13%)
PRL 26.81 Increased By ▲ 0.23 (0.87%)
PTC 14.01 Decreased By ▼ -0.04 (-0.28%)
SEARL 58.53 Decreased By ▼ -0.45 (-0.76%)
SNGP 68.01 Decreased By ▼ -0.94 (-1.36%)
SSGC 10.47 Increased By ▲ 0.17 (1.65%)
TELE 8.39 Increased By ▲ 0.01 (0.12%)
TPLP 11.05 Decreased By ▼ -0.01 (-0.09%)
TRG 63.21 Decreased By ▼ -0.98 (-1.53%)
UNITY 26.59 Increased By ▲ 0.04 (0.15%)
WTL 1.42 Decreased By ▼ -0.03 (-2.07%)
BR100 7,943 Increased By 105.5 (1.35%)
BR30 25,639 Increased By 187.1 (0.73%)
KSE100 75,983 Increased By 868.6 (1.16%)
KSE30 24,445 Increased By 330.8 (1.37%)

COLOMBO: Sri Lanka will relax its currency band from next week, its central bank said on Friday, as part of efforts to move towards a market-determined exchange rate as it seeks to secure a $2.9 billion bailout from the International Monetary Fund.

The central bank also raised interest rates by 100 basis points to tackle inflation now running at 50% as the country endures its worst financial crisis since independence from Britain in 1948.

The currency band was widened earlier on Friday to 10 rupees either side of the spot rate, from 7.50 rupees previously, but Central Bank Governor P. Nandalal Weerasinghe said guidance on the currency band would be removed from next Tuesday.

The central bank has been fixing the spot rate daily but did not say whether it would continue to do so after Tuesday.

“The central bank has seen gradual improvement in the forex liquidity in the banking sector. We are careful to contain excessive volatility,” Weerasinghe said, adding that the central bank purchased $308 million to maintain exchange rates within the corridor mandated by the monetary authority.

“The central bank now has the capacity to rebuild reserves while minimizing forex market intervention.” The central bank raised interest rates by 100bps, pushing its standing deposit facility rate and standing lending facility rate, to 15.50% and 16.50% respectively.

Sri Lanka is awaiting approval for the IMF bailout package after seeing economic growth shrink by an estimated 9.2% last year amid soaring inflation that hit 50% last month.

The central bank will also next week suspend a mandatory directive given to commercial banks to convert 15% of all dollar earnings, the central bank chief said.

Comments

Comments are closed.