Governor of the Central Bank of Sri Lanka Dr. Indrajit Coomaraswamy last week said exporters don’t convert money, importers advance their purchases creating even greater pressure on the exchange rate.
“During my tenure at the Commonwealth Secretariat, I worked in may be 20 to 25 countries and the attitude to the exchange rate in this country is unique. People think if the currency is depreciating, the economy is about to collapse which is a myth,” Coomaraswamy said.
Addressing a press conference last week, he said that although growth is low but improving, inflation is still well within target and reserves had declined slightly due to debt repayments and intervention in the currency market.
“So where is this economy collapsing? The exchange rate has depreciated by 10% which is true but the real effective exchange rate is now 100. So if we are serious, the only way is to increase exports so that we can repair this external debt burden which is a major millstone around the economy,” the Governor said.