Sunday Dec 22, 2024
Sunday Dec 22, 2024
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Under pressure to ensure a realistic exchange rate, the Central Bank yesterday said it will stand ready to take further measures as appropriate, with the aim of achieving stability in the external and the financial sectors, to support real economic activity on a sustained basis.
“We have paid attention to adjusting the exchange rate. However, the stand of both the Monetary Board and the Central Bank is that given the current economic conditions, the existing rate is the most appropriate,” Central Bank Governor Nivard Cabraal yesterday told journalists at the post-Monetary Policy Review media briefing yesterday.
He also said that subject to certain changes in future economic conditions, the Central Bank will intervene and make prompt adjustments.
“There are different outcomes from each policy decision and certain experts can argue on the delay in the Central Bank implementing such policies. We know what should be done. But before taking such a decisive measure, the Monetary Board will have a lengthy discussion on the ramifications to the entire economy. We are closely monitoring the situation and will make adjustments after deliberate forecasts of present, future and overall economic objectives of the country,” Nivard explained.
The International Monetary Fund (IMF) this week urged Sri Lanka to pursue a market-determined and flexible exchange rate to facilitate external adjustment and rebuild international reserves. The official exchange rate has been effectively pegged to the dollar at a maximum of Rs. 203 since late last year. Nine leading chambers of commerce and industry on Thursday also called for flexibility on the exchange rate.
