The Sri Lankan rupee recovered further on Monday, after hitting a record low in the previous week, helped by mild dollar inflows. The rupee ended at 182.30/40 on Monday, compared with 182.60/80 in the previous session, market sources said. On Thursday, the rupee had fallen to an all-time low of 183.00 against the dollar. The currency fell 19 percent in 2018, making it one of the worst-performing currencies in Asia, Refinitiv Eikon data showed, due to heavy foreign outflows.
The currency has declined about 5.1 percent since a political crisis began on October 26. ** The central bank last week said it will stick to an exchange rate policy of cautious intervention in times of excessive volatility in the forex market. That policy is designed to maintain competitiveness of the exchange rate and support the rebalancing of the current account, thereby supporting a gradual build-up of central bank chief Indrajit Coomaraswamy said on Wednesday, unveiling economic policies for 2019.
President Maithripala Sirisena appointed a cabinet of ministers from his rival party on December 21 after he was forced to reinstate Ranil Wickremesinghe as prime minister, 51 days after he was sacked. ** The political crisis is expected to ease, though tense relations between the two men could cause fiscal problems, analysts have said. Parliament has approved 1.77 trillion rupees ($9.39 billion) to meet the first four months of expenditure in 2019, averting a government shutdown from January 1.
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