📈 Govt. Defends Exchange Rate Framework Amid Rupee Pressure

The government has dismissed economic crisis fears, attributing recent rupee fluctuations to external shocks—like Middle East tensions—rather than domestic policy, while reaffirming its commitment to a flexible exchange rate regime. Key Economic Indicators & Currency • Exchange Rate: The interbank rate averaged Rs. 330/US$ (bidding Rs. 327, selling Rs. 332). The IMF has not directed any currency manipulation. • External Funding: Sri Lanka expects up to US$ 1 Bn in 2026, including US$ 700 Mn from the IMF EFF tranche, US$ 480 Mn from the ADB, and US$ 150 Mn from the World Bank. • Remittances & Credit: Worker remittances are projected to exceed US$ 9 Bn in 2026. Private sector credit expansion grew to ~Rs. 2 Trillion in 2025, adding Rs. 250 Mn monthly recently. Import Controls & Sector Impact • Vehicle Imports: The government denied suspension plans. To moderate forex demand, a 50% surcharge was imposed on May 15. LC openings spiked to 9,429 on May 18 due to speculation but dropped to US$ 3.73 Mn and US$ 5.1 Mn in the following days. • Energy Sector: Driven by rising global prices, the fuel import bill is projected to hit a 2026 peak of US$ 521 Mn in May (up from US$ 316 Mn in April), before easing to US$ 332 Mn in June and US$ 241 Mn in July. _Note: Based on official provisional ministry briefings._