By: Vibhuti Pathak
Sri Lanka’s rupee, battered by economic crises since 2022, is now rebounding against major currencies, according to State Minister for Finance Ranjith Siyambalapitiya. Boosted by extended currency swaps with India’s Reserve Bank, the rupee has appreciated significantly, marking a positive turn amid ongoing efforts to navigate the nation’s financial challenges.
The rupee has faced depreciation due to an unprecedented economic crisis since 2022 and has started to make gains in comparison to other countries. The announcement was made by Finance Minister Ranjith Siyambalapitiya on Friday, May 3.
He said during the first four months of the year, the Sri Lankan rupee had appreciated by 9.1 per cent against the US dollar, 12.7 per cent against the Euro, 10.8 per cent against the UK pound, 11.4 per cent against the Chinese Yuan, 21 per cent against the Yen, 9.5 per cent against the Indian rupee and 14.2 per cent against the Australian dollar.
When the Sri Lankan economy slumped during the first quarter of 2022, which led to the announcement of its first-ever sovereign default, Sri Lanka was assisted by India for imports of essentials.
The Sri Lankan rupee was boosted by the Reserve Bank of India’s extended currency swaps.
Indian assistance was worth over £2.84 billion which provided a lifeline to ailing economy until the deal for an IMF bailout of £2.059 billion was sealed in March 2023.
Siyambalapitiya underscored Sri Lanka’s dedication to financial prudence, navigating difficult decisions for economic rejuvenation post a 2022 default. The country settled debts of approximately £1.775 billion in 2022 and £1.846 billion in 2023 to multilateral creditors like the IMF and World Bank, upholding commitments amid bilateral debt payment suspension.
“We have maintained strict financial discipline while taking unpopular decisions to facilitate economic recovery,” Siyambalapitiya said.
