Published On: Fri, Feb 16th, 2018

Rupee falls Rs 1.01 to Rs 157.20 to the $

The rupee’s average selling price for telegraphic transfer (TT) among banks fell sharply by Rs 1.06 to Rs 157.20 to the US dollar yesterday (15) as political uncertainty after the Sri Lanka Podujana Peramuna (SLPP) shadow leader and former President Mahinda Rajapaksa’s SLPP swept the Local Government Polls on 10 February.

The rupee for TT transfer operates under a 24-hour lag period.

Nonetheless, year on year (YoY) as at yesterday, the rupee has fallen by Rs 4.76 (3.12 per cent), having had closed on 15 February, 2017 at Rs 152.44 to the dollar, thereby causing inflationary pressure as Sri Lanka is an import dependent economy.

However, a number of essential items operate under a controlled price regime, thereby effectively keeping a lid on prices despite a weak rupee.

Meanwhile, Central Bank of Sri Lanka (CBSL) Governor Dr. Indrajit Coomaraswamy yesterday (15) said that he expected inflation to remain in the mid single digit levels this year. CBSL Economic Research Director Dr. Y. Indraratne making a presentation yesterday, showed that island-wide inflation, YoY last year increased from 4.2 per cent to 7.3 per cent, led by the increases in Value Added Tax and the drought which affected rice and coconut cultivation in particular as well as hydroelectricity power production.

Last month’s island-wide inflation was not given.

However, inflation in Colombo alone last year increased from 4.2 per cent to 7.1 per cent on a YoY basis, though decelerating to 5.8 per cent, last month (January, 2018).

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