![]() ![]() "But without clear communication on intention for IMF program and debt restructuring, it does not mean much right now."Īnalysts said the devaluation was insufficient by itself, and the government needed to take additional policy steps, including increasing taxes to shore up public revenues and adjusting fuel prices. "Currency flexibility is something IMF will see as a pre-condition to a program, so it makes future negotiations with them easier," Thilina Panduwawala, Head of Economic Research at Frontier Research said. He did not say whether the government would approach the IMF. "We believe this will support growth and assist us to face external challenges better," Cabinet spokesman and Media Minister Dullas Allahaperuma told reporters on Tuesday. Sri Lanka's foreign reserves fell to $2.36 billion at the end of January and it is due to repay about $4 billion in debt in the rest of 2022, making it likely that government will seek IMF assistance.Īs yet, Sri Lanka has not formally sought talks on an IMF programme, an IMF official said, declining to be named. Late on Monday, the Central Bank of Sri Lanka, with immediate effect, set an exchange rate limit of 230 rupees per dollar compared to a limit of 200-203 that had prevailed since October.Īnalysts said the depreciation was likely done to encourage remittances, a major source of foreign exchange in Sri Lanka, which dropped to a 10-year low of $5.49 billion in 2021 as a result of the COVID-19 pandemic. ![]() COLOMBO, March 8 (Reuters) - Sri Lanka's central bank has devalued the rupee by up to 15%, taking one of several steps analysts said are needed to obtain a International Monetary Fund loan programme that would boost currency reserves and help negotiate debt restructuring.
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