Rupee appreciation due to Dollar liquidity – State Minister

The official exchange rates are better than the rates offered in the grey market for the first time after many months, Finance State Minister Shehan Semasinghe said.

Speaking to the Daily News yesterday, he said the recent appreciation of Rupee is due to the improvement of US Dollar liquidity and the confidence that has built up with the approaching Extended Fund Facility (EFF) of the International Monetary Fund (IMF).

He said the Dollar liquidity has increased due to the improved tourism income and foreign remittances and due to the inflow of financial aid from various organizations.He noted that the foreign reserves have also gradually improved. He, however, pointed out that a sharp appreciation of Rupee within a short period is equally bad as a sharp depreciation of Rupee within a short period. He said that the Central Bank of Sri Lanka (CBSL), as the regulator of the country’s finance policy, is cautious about that.

Responding to General Secretary of JVP Tilvin Silva’s comment that the appreciation of rupee is a ruse, the State Minister said that he was sorry for the little knowledge Silva has on economic affairs, adding that Silva would not have labelled the IMF assistance as another debt trap if he had a sound mind.