CB watches over rupee trends View(s):The Central Bank (CB), in a bid to curb volatility in the US dollar, has begun monitoring all bills and trades to ascertain the reason for a depreciating Sri Lanka rupee. While the CB has assured of sufficient foreign reserves in an effort to stabilise the market, money market dealers say the fluctuations are essentially due to a supply and demand scenario. However , it is learnt that the International Monetary Fund has urged Sri Lanka to refrain from using foreign reserves to defend the rupee. Since early May, the CB has been pumping dollars in to the market to curb volatility which hasn’t had much of an impact though. Dealers said larger quantities need to be used to contain the depreciating rupee otherwise the dollar rebounds.

Source: Sunday Times May 19, 2018 19:02 UTC