Govt. will defend rupee, has enough forex reserves -Ravi K
Thursday, 26 February 2015 00:59
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Reuters: Sri Lanka will defend the rupee currency and has enough foreign exchange reserves to prevent any further depreciation, Finance Ministry Ravi Karunanayake said on Wednesday.
The rupee lost 1.4%of its value against the dollar between the start of the year and 20 February and dealers say the currency remains under downward pressure on persistent demand from importers for dollars.
Foreign currency reserves fell 13.2%to $ 6.28 billion in January alone, recent Central Bank data showed, as the monetary authority intervened in foreign exchange markets to defend the currency.
“We can hold it as long as we like it,” Karunanayake told reporters. “There are enough reserves. If anybody thinks that they can take undue advantage, then they are sadly mistaken.”
Karunanayake said on 9 February that the rupee would be held at current levels and “there won’t be any devaluation at all.”
The Central Bank has been defending the spot currency at 132.90 since Thursday after keeping it at 132.80 from 6 February.
The Central Bank has also increased the yield on Sri Lanka’s 91-day treasury bills by 24 basis points this year while keeping its key policy rate at a record low, which currency dealers see as a move to ease pressure on the rupee.
