Wed, 04 Oct 2023

COLOMBO, June 1 (Xinhua) -- Sri Lanka's economy will recover at a rapid pace in the second half of 2023, Central Bank Governor Nandalal Weerasinghe said here on Thursday.

The inflation will drop to single digits by the end of July 2023, said Weerasinghe when addressing a press conference in Colombo.

The strict fiscal and monetary policy of the central bank was a main reason for this rapid decrease, he said.

The central banker believed that the bank did not have a predetermined level at which it would halt the appreciation of the Sri Lankan rupee.

Instead, the central bank aimed to curb excessive volatility in the South Asian country's currency while allowing it to fluctuate within a flexible exchange rate framework, he said.

Since March, the rupee has appreciated from approximately 360 against the U.S. dollar to around 290 presently.

Weerasinghe said the central bank had purchased U.S. dollars from the market to bolster reserves and mitigate extreme movements in the rupee's value.

In May, the bank acquired 662 million dollars, bringing the total net purchases to 1.671 billion dollars so far this year.

As of the end of May, Sri Lanka's gross foreign reserves stood at an estimated 3.1 billion dollars, according to the central bank.

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