Sri Lanka's embattled rupee currency will stabilise and the central bank will intervene to smoothed high volatility as there is no reason for a weaker currency, the central bank's senior deputy governor said on Thursday. The rupee hit a record low of 157.90 per dollar on Wednesday. It reached all-time lows in five straight sessions last week.
"I don't see any fundamental reason why the currency is so volatile within a very short period of time," Nandalal Weerasinghe told Reuters in an interview. "It is too much volatility within too short a period." "All the fundamental economic factors are in favour of a stable currency. If there is too much volatility, we will intervene. There is no specific rate that we are intervening."
The island nation's foreign exchange reserves are at a record high $10 billion after a $2.5 billion inflow last month from sovereign bond sales. The currency declined 0.9 percent against the dollar last week and around 3 percent this year. It shed 2.5 percent in 2017. Weerasinghe said the central bank intervened on Tuesday and Wednesday in the absence of exporters' dollar sales.
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