Release of $ 200 m to State banks to ease pressure on rupee

A combined release of over $ 200 million today to two State commercial banks is likely to ease pressure on the rupee, forex market sources said.

Last week commercial banks were quoting dollar selling rate of between Rs. 222 and Rs. 230 whereas the Central Bank indicated the average selling rate of only Rs. 200.50, as against Rs. 186.28 a year ago.

With several urgent import bills and individual customer requests pending, Daily FT learns that the Central Bank on Friday eventually agreed to release dollars to the Bank of Ceylon and the People’s Bank.

Spike in exchange rate last week was despite Sri Lanka receiving $ 720 million within the IMF’s overall release of $ 650 billion in new Special Drawing Rights to its members as support to combat the COVID-19 pandemic.

“To date the Central Bank has not officially announced the receipt of IMF funds, which is surprising,” analysts claimed.