Rupee stabilises at Rs.89-90 
[01 Feb 2001]

The float of the Sri Lankan rupee, the much talked about subject in the past few weeks in finance and marketing sector, has now stabilised at Rs.89-90 per US dollar, the Central Bank Governor told the weekly Cabinet news briefing yesterday.

He further stated that this was the result of allowing the rupee to reach the equilibrium value through market forces and not by arbitrary moves.

Due to the free float of the rupee the US dollar could be bought and sold in competitive rates and he further brought to attention that liberalising exchange rate is not an alien situation to Sri Lanka's economy.

In recent years similar situations had developed in Thailand and Indonesia, the Deputy Governor added.

Currently Sri Lanka spends $4 million on fuel imports and $200 million on arms causing a decline in the foreign reserves.

Hence the Central Bank was compelled to make this decision to protect the currency and the exchange rates, revealed the Deputy Governor.

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