💵 Sri Lankan Rupee Edges Lower Against US Dollar Amid Market Volatility

• Exchange Rate Movements: The Sri Lankan rupee depreciated against the US Dollar on Wednesday. The indicative telegraphic transfer LKR/USD buy/sell rate edged higher to Rs. 320.40/Rs. 330.81, compared to Rs. 318.32/Rs. 328.69 on Tuesday. However, the currency remains stronger than Monday's rates and last Thursday's peak of Rs. 342.63/Rs. 354.03. • Interbank Market: The buy/sell LKR/USD interbank spot contracts closed higher at Rs. 328.50/Rs. 332.00 yesterday, up from Tuesday’s Rs. 322.00/Rs. 325.00, but lower than last week's weakest level of Rs. 331/Rs. 348. • Central Bank Intervention: To calm a panicking market, the Central Bank of Sri Lanka (CBSL) utilized moral suasion rather than excessively selling down foreign reserves. The CBSL capped trades at Rs. 330 for certain banks and signaled potential new measures to compel exporters to convert dollar earnings sooner. • Economic Context: CBSL Governor Dr. Nandalal Weerasinghe stated the bank is prepared to use moral suasion to contain excessive exchange rate volatility driven by global supply disruptions from the Middle East war.