Sri Lanka’s Central Bank has strengthened itself to intervene at any point to control the fluctuations in the exchange rate as the dollar purchases for 2024 from the market surpassed    $ 1.6 billion by April, State Minister of Finance, Dr. Ranjith Siyambalapitiya said.

Speaking to the media on Monday (20), he said that the Central Bank of Sri Lanka (CBSL) has purchased a total of $ 1,620 million in the first four months of 2024 after purchasing $ 469.5 million and selling $ 50 million in April.

He said due to such purchases of foreign exchange from the market, official reserves at the CBSL stood close to $ 5.5 billion by the end of April, “therefore, they(CBSL) can intervene at any time to control the fluctuations in the currency,” he added. 

The rupee (LKR) which has been appreciating since the beginning of the year saw a slight depreciation last week by about 1-1.5%.

“It is normal for fluctuations to happen in the exchange rate when there are changes in the demand and supply in the foreign exchange market,” Dr. Siyambalapitiya said.

According to the CBSL data, Sri Lanka's rupee has appreciated against the US dollar (USD) by 7.5%, during the year up to 17 May.

Moreover, the State Minister said that if the CBSL had not purchased the amount of dollars it purchased from the market up to April, the rupee would have strengthened to a point where the dollar would be at Rs. 250.

“But the purchases are made by the Central Bank to strengthen the exporters and If the dollar appreciates, the Central Bank has the ability to release dollars to the market to control the exchange rate,” he added.

Therefore, Dr. Siyambalapitiya said that there is no need for anyone to decide whether the dollar will appreciate or depreciate largely, as the CBSL is now strong enough to maintain the value of the dollar and the rupee at a certain level through the use of its reserves.