Rupee down 16.1% against U.S. dollar by Dec. 28

The Sri Lankan rupee has depreciated 16.1 percent against the U.S. dollar up to December 28 despite measures taken by the Central Bank and the government, which include open market operations and import restrictions. 

Up to the same date, the rupee has depreciated 12.6 percent against the euro, 11 percent against the sterling pound, 17.7 percent against the Japanese yen and 8.2 percent against the Indian rupee.

The Central Bank said the widening trade deficit, tight conditions in the global markets and excessive speculation in the domestic market exerted pressure on the exchange rate.

The Central Bank expects that imports would moderate in coming months, in response to measures adopted to curb imports of motor vehicles and non-essential goods as well as the impact of the rupee depreciation.

Meanwhile, the gross official reserves have fallen to US$ 7.01 billion at end November 2018 compared to US$ 7.2 billion in mid November. 

The government sold net US $ 519 million to defend the rupee in November and US $ 303.5 million in October.