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Central Bank disputes Fitch Solutions’ forecast on rupee

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17 March 2023 07:36 am - 14     - {{hitsCtrl.values.hits}}

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Disputing the grim forecast of Sri Lanka’s exchange rate by Fitch Solutions by the year-end, Central Bank Governor Dr. Nandalal Weerasinghe raised concerns on the basis of the forecast while stressing that such long-term predictions on exchange rate are not prudent.

Fitch Solution recently maintained its forecast for the rupee to weaken to a record low of 390 per dollar by the year-end despite the positive prospects of the country securing the US$ 2.9 billion International Monetary Fund (IMF) bailout package.

Dr. Weerasinghe noted that annual debt service obligation to the tune of US$ 6 billion until 2029  has been one of the assumptions of this forecast. However, he stressed that such a high figure of foreign debt servicing is unlikely given that the country is engaged in debt restructuring negotiations. 

Further, he opined that such a long-term prediction on an exchange rate of a currency is not practical.

Referring to the recent appreciation of the rupee, he remarked that the market will adjust to a new rate and if the need arises, the CB stands ready to intervene in the forex market in a limited capacity.

“We have a small market, that’s why the exchange rate fluctuates a lot. That’s why the CB is required to intervene in the market to a certain extent. However, the CB would not act against the direction of market forces,” he stressed.


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  Comments - 14

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  • Iwazaru Friday, 17 March 2023 08:07 AM

    This is called the "Cabalrala Syndrome"! The end result is to bolt from the back door(s).

    Jude Friday, 17 March 2023 08:21 AM

    If SL don't get the bailout MONEY before the end of this year, then rupee 450 per dollar by Christmas yeah

    Ganesh Friday, 17 March 2023 08:22 AM

    Dollar price is not 345.. it is much much more. Don’t lie central bank. I was quote high rate in the money exchange shop in wellawatte and at fort area. One shop offer 370 how you are saying 345.

    Jude Friday, 17 March 2023 08:24 AM

    Government expect IMF to give good news on Marc 20th, but 1st tranche gonna take long time to get!!

    Truth Friday, 17 March 2023 08:39 AM

    Whatever, people believe the recent appreciation of the Rupee is similar to the sugar vessel episode.

    Adwani Friday, 17 March 2023 08:41 AM

    Fitch Rating is not a Political entity, FR's forecast always, in majority; comes true.

    Jude Friday, 17 March 2023 08:58 AM

    You've all the traits of a politician, yeah keep blaming others!!!

    Lumbini Friday, 17 March 2023 09:13 AM

    Still Sri Lanka has no credible policy framework to stabilise the exchange rate.

    GHT Friday, 17 March 2023 12:21 PM

    Nandalala contradicts his own statement, given his recent revelation participating in a gathering he stated that the US Dollar exchange rate may go higher than the Rupee-exchanged against it for about Rupees 1000/- now rejects Fitch ratings' prediction of Rupees 390/- against single US Dollar?

    GHT Friday, 17 March 2023 12:27 PM

    Understand the fact, that the FITCH ratings are always a BULLISH statistics, it is used, when the American targets a country with their usual outmaneuvering tactics to sabotage their economy and creating political hullabaloo. That is what rright now really happening in Sri Lanka.

    A Friday, 17 March 2023 12:51 PM

    Fitch could not predict the US banks fall . How come predicting the Rupee in 1 years time...

    Punchi Friday, 17 March 2023 01:01 PM

    We can get a Sanga order ordering the rupee to appreciate to a preferred amount

    Premalal Perera Friday, 17 March 2023 02:30 PM

    As long as these exchange rate policies are operation, no foreign direct investment will flow into the country. This governor is no better than any other except Mr.Kumaraswami who was a head and shoulder above. They are only interested in themselves.

    Rody Ellott Saturday, 18 March 2023 03:54 PM

    How Rupee is going to be Strong with the IMF loan? Take more and more time to strong rupee.


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