State Minister for Finance, Ranjith Siyambalapitiya, announced on Friday that Sri Lanka's rupee has begun to regain strength against major currencies, marking a positive turn in the country's economic outlook after facing severe depreciation since 2022.
During the first four months of the year, the Sri Lankan rupee exhibited significant appreciation, with gains of 9.1 percent against the US dollar, 12.7 percent against the Euro, 10.8 percent against the UK pound, 11.4 percent against the Chinese Yuan among other currencies.
The resurgence of the Sri Lankan currency follows a period of economic turmoil, highlighted by the nation's first-ever sovereign default in 2022.
During this challenging period, Sri Lanka received crucial assistance from India, facilitating imports of essential goods and stabilizing the rupee through extended currency swaps provided by the Reserve Bank of India.
India's support, valued at over USD 4 billion, served as a lifeline for the struggling economy until the IMF bailout deal worth USD 2.9 billion was secured in March 2023.
Ranjith, highlighted how the government is maintaining strict financial discipline and implementing unpopular yet necessary measures to facilitate economic recovery.
Despite the default declared in 2022, Sri Lanka has continued to honor its multilateral debt obligations, repaying USD 2.5 billion in 2022 and USD 2.6 billion in 2023 to institutions such as the IMF, World Bank, and Asian Development Bank.
However, bilateral external debt payments remain suspended since the announcement of the default.
"We have maintained strict financial discipline while taking unpopular decisions to facilitate economic recovery," stated the minister.
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