The Treasury Secretary, Dr. P. B. Jayasundara made these comments in an interview with Reuters yesterday (Nov 24).

“The devaluation was a considered move that was essentially "a market correction," he said.

"Having the reserve level of $6-7 billion is the time to do this correction. We had $8 billion reserves and the reserves are under pressure. If you continue to let that happen without giving a signal, at some point you will have to do this or take some other drastic measures," Jayasundara told Reuters.

He said the exchange rate policy had encouraged imports, as did low interest rates, while exporters grew less competitive and had less incentive to expand.

"In my view, some adjustment should have happened even before to prevent this. It should be a market-driven, stable exchange rate. When the market doesn't produce it, the Central Bank needs to come into help stability," he added.

Sri Lanka enjoyed as an emerging frontier destination, after winning a 25-year war, says Reuters.