Rupee down to Rs. 178.72 against the dollar | Sunday Observer

Rupee down to Rs. 178.72 against the dollar

The rupee which nosedived last week following the Easter Sunday attacks that is expected to weigh in on the economy having a ripple effect on all sectors.

The Rupee plunged from Rs. 177.45 against the Greenback at the start of the week to Rs. 178.72 at the close of the week. The rupee depreciated by around 0.6 percent against the US dollar during the week. The local currency lost value by around 16 percent last year.

The benchmark All-Share Price Index nosedived 3.63% when the stock market reopened on Tuesday before edging up slightly in the following two days.

The Easter Sunday bombings have weighed in on investor sentiments resulting in a more bearish market over the past two weeks. Investors will adopt a wait and see approach according to market analysts.

Economists speculate the impact of the attacks to be far reaching with tourism and foreign direct investments to take the worst hit. Tourism industry experts said the number of arrivals would drop by around 30-50 percent.

Sri Lanka Tourism Development Authority Chairman Kishu Gomes said arrivals will come down by around 50 percent. Sri Lanka Tourism anticipates 2.5 million visitors this year and over three million next year which according to industry experts are unlikely to come by given the sudden decline in security in the country.

The tourism industry contributes around 11 percent to the GDP.Several business chambers have proposed measures to the government to improve security and revive the economy.

Capital Economics has cut its economic growth forecast for Sri Lanka to a mere 1% from 3.2%. However, the Central Bank maintains its 4% projection for now. - LF

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