The rupee falling so rapidly is a concern for the country, specially for exporters, National Chamber of Exporters President Ramal Jasinghe said.
“The Central Bank has allowed market forces to determine the value of the rupee. However, it is depreciating against the dollar daily. This is not a healthy situation and the Central Bank should intervene to control this scenario,” he said.
He also said that a section of the members of the Chamber is of the view that the free flow of the rupee should be allowed.
“We had a meeting of our members on Thursday and our argument was that appreciation or depreciation of rupee could happen at any point of time. We understand the stance of the Central Bank not to intervene because there will be exchange gain that will benefit the value added exports.
As the government is considering controlling and monitoring the situation with related mechanisms to restrict certain imports to the country, we expect the exchange rate to stabilise shortly, he said.
“While positive steps taken to balance against the imports and exports are needed and measures for improving productivity and import substitution is necessary. We believe that the Central Bank will address the fiscal stability of the country which will adept to benefit from this situation,” he said.
Stressing that the global impact of the dollar was beyond our control, he said, “We understand that there are certain challenges, but these constrains are temporarily in nature. The market forces will determine the currency rate.”
Generally the exporters gain much from currency depreciation, he said that Sri Lanka imports 97 percent of the input that goes in for exports. This is a pretty bad situation and we urgently request the authorities to take remedial action to bring relief to the exporters who are the driving force of the economy, he said.
“It is very difficult to predict the actual cost of a product that is been exported as the price fluctuation is so high. The budgeting and forecasting have become a challenge.
This also affects our competitiveness in the global market and is a big blow to the export volumes. In terms of production, as we do not engage in mass production we are unable to gain from economies of scale as in the case of countries that produce huge quantities,” he said.
The exporters strive to reach the targets set for the sector despite the adverse situation they are faced with such as having to pay the highest electricity rate and also acute skill labour shortage.
“We fight against these negativities and further rupee depreciation will have an overall impact with serious consequences, he said.