Hon. (Dr.) Anil Jayantha - Minister of Labour and Deputy Minister of Finance and Planning

¶ 01 Mr. Speaker, as I noted earlier, the rupee’s indicative rate yesterday was around LKR 333; higher quotes may reflect short-term panicking and demand spikes. Based on measures taken, we expect stabilization within this week, using available tools as needed. A 4.8 percent depreciation year-to-date must be viewed in global context—stronger dollar amid geopolitical tensions. The 2022 experience of extreme depreciation was due largely to domestic policy failures; today’s movement is far smaller.

¶ 02 On IMF inflows: USD 700 million is unaffected by the exchange rate for the purposes of external reporting—borrowing and repayment are in dollars. Domestic reporting is in rupees; hence rupee equivalents vary, but the dollar amounts do not. For domestic rupee debt instruments, FX translation effects are separate. The absolute external debt stock in dollars does not increase due to the exchange rate; the rupee valuation changes. FX movements can have both adverse and beneficial effects depending on exposures. We will manage the exchange rate in an orderly manner.