Lankan rupee falls better than other currencies: FM

Sri Lanka's rupee depreciation against the US dollar is not as bad as the other currencies in the region, Finance Minister Mangala Samaraweera has said.

Addressing the Chamber of Commerce here last night, Smaraweera said Sri Lanka's rupee had fallen 3.3 per cent so far this year, which is less than several other currencies in the region.

While Indian rupee fell by 8 per cent, Pakistan's rupee has depreciated 10.5 per cent, Indonesia's rupiah 5.2 per cent and the Thai baht 5.4 per cent he said.

"The recent depreciation of the rupee is due to external factors, particularly the rise in policy interest rates in the United States," Samaraweera said.

"This has affected all emerging and frontier market economies all over the world. In the last couple of days the Sri Lankan rupee has appreciated slightly as macroeconomic fundamentals do not warrant a serious depreciation of the currency," he said.

"The policy of this government is that the currency should be determined by market forces," he added.

Sri Lankan rupee had fallen to 160 against the dollar, a record low, prompting Opposition criticism of economic mismanagement by the government.

"Do not be surprised if the US dollar hit 200 levels soon," Bandula Gunawardena, an opposition legislator said.

By yesterday, the rupee had gained to 158.25/35 to the US dollar in the spot market.

Speaking at the same event, the Chamber's chief Rajendra Theagarajah said Sri Lanka's economic stability and policy consistency had improved from 2017, but business confidence was still lagging amid political uncertainty.

"Business confidence has been low in the backdrop of political uncertainty," Ceylon Chamber of Commerce Chairman Theagarajah said.

"Macro stability has been achieved to a great extent with higher level of reserves, FDI (foreign direct investment) and exports reaching all-time highs in 2017," he said.