Despite such factors however, the report stated that prospects for the LKR over the medium term were positive with appreciation of the rupee sustained appreciation of the rupee anticipated from late into Q3 and through Q4.
The report’s positive medium term outlook on the rupee were however contingent on the disbursement of the final US$ 430 million trance of the International Monetary
Fund’s Stand By Arrangement, in addition to the upcoming sovereign bond issuance and reports of further IMF funding in the form of a US$ 500 million security arrangement upon completion of the SBA, which in combination are expected to return the country’s balance of payments to a US$ 0.9 billion surplus.
The report also projected an increase in inflation to 7.2%, as compared with the Central Bank of Sri Lanka’s current projection of 7% while interest rates were anticipated to be held at their current levels of 7.75% and 9.75%,for repo and reverse repo rates respectively. (CF)