Live NewsSri Lanka Rupee against US Dollar

Deputy Minister of Finance and Planning Dr. Anil Jayantha says the recent depreciation of the Sri Lankan Rupee against the US Dollar is not the result of any government policy or wrong decision, but rather a consequence of the global crisis triggered by the ongoing conflict in the Middle East.

Speaking at a special media briefing held today (22) at the Department of Government Information, the Deputy Minister stated that the global crisis had led to a sharp increase in fuel prices, as well as higher costs for gas, fertilizer, shipping, and insurance rates.

He noted that the dollar prices of imported goods had risen significantly in recent months, while export prices had not increased at the same rate, placing further pressure on the country’s economy.

Dr. Anil Jayantha also pointed out that global efforts to strengthen and stabilize the US Dollar had increased demand for the currency, causing investments to shift towards the US Dollar and making it stronger against other currencies worldwide.   

He also stressed that the government has not taken any decision to shrink the economy or impose import restrictions under the current circumstances.

The Minister further stated that fuel prices had risen sharply during the months of March and April, and that payments for fuel purchased at those elevated prices are scheduled to be made in May. He added that, as of May, the country’s fuel import bill has increased from around USD 120–200 million to USD 521 million.

“Accordingly, demand for the Dollar has increased while the supply available to meet that demand has become limited in the short term. As a result, the exchange rate rose abnormally and exceeded Rs. 350 yesterday.”

However, he stated that the International Monetary Fund’s (IMF) Executive Board is set to consider the combined Fifth and Sixth Reviews under the Extended Fund Facility for Sri Lanka on May 27, and expressed confidence that both tranches would then be released.

He further noted that in addition to this, Sri Lanka is also expected to receive financial assistance from the Asian Development Bank (ADB) and the World Bank.

Further commenting on the matter, Deputy Minister of Economic Development Dr. Anil Jayantha stated:

“However, I have good news for those concerned about the country. At present, the midpoint in the interbank foreign exchange market has come down to around Rs. 330. The buying rate is around Rs. 327 while the selling rate is around Rs. 332. I believe this is encouraging news for people who care about the country.”

“On May 27, the IMF Executive Board is to decide on two tranches totaling USD 700 million to be released, and we strongly believe those funds will be received. In addition, Sri Lanka is expecting financial assistance of up to USD 480 million from the Asian Development Bank, USD 150 million from the World Bank by the end of June, and a further USD 50 million from another affiliated institution, “ he added.

The Sri Lankan rupee has been identified as the worst-performing currency in Asia this month, according to a report published by a leading global business news platform.

The report stated that the Sri Lankan rupee had weakened significantly against the US dollar in recent days and warned that the currency could depreciate further.

Commenting on the situation, Professor Wasantha Athukorala of the Department of Economics and Statistics at the University of Peradeniya said the rapid depreciation of the rupee within a short period posed a serious risk to the country’s economy.

He warned that inflation could rise sharply in the future if urgent measures were not taken to control the situation.

Meanwhile, Member of Parliament Ravi Karunanayake claimed that the current government had no proper mechanism in place to prevent the rupee from depreciating further.

Former MP Piyal Nishantha also stated that both the government and opposition should work together to take immediate action to address the prevailing economic crisis.

Responding to concerns over the issue, President Anura Kumara Dissanayake yesterday said the depreciation of the rupee would be temporary and urged the public to face the situation with resilience.

The ongoing depreciation of the Sri Lankan rupee against the US dollar can be managed through planned financial inflows and policy measures, according to Minister Vijitha Herath.

Speaking at the weekly Cabinet media briefing held today (19), Minister Vijitha Herath said expected foreign currency inflows from international financial institutions, along with import controls, would help stabilise the situation.

He noted that the weakening rupee could lead to higher prices for imported goods, creating potential inflationary pressure across the economy.

However, the Minister said the government expects around US$ 700 million from the International Monetary Fund (IMF) in the near future, along with a further US$ 200 million from the Asian Development Bank (ADB).

“These inflows will bring additional foreign exchange into the country. At the same time, import restrictions will help reduce dollar outflows. Export earnings are also expected to improve due to exchange rate movements,” he said.

Minister Vijitha Herath added that, taking these factors into account, the government believes the situation can be effectively managed going forward.

The depreciation of the Sri Lankan Rupee during this year has been primarily driven by the ongoing crisis in the Middle East and the resulting increase in global oil prices, the Governor of the Central Bank of Sri Lanka (CBSL) Dr. Nandalal Weerasinghe has stated.

Speaking at a media briefing held today (18), Governor Weerasinghe noted that rising foreign exchange requirements for oil imports have placed additional pressure on the rupee.

He further pointed out that in 2026, the Sri Lankan rupee depreciated by 4.8%, while other regional currencies have also weakened, including the Indian rupee by 6.4%, the Nepalese rupee by 6.2%, and the Indonesian currency by 5.2%.

According to him, this is not a situation unique to Sri Lanka, but rather a global economic shock affecting many countries that heavily depend on oil imports.

Dr. Weerasinghe also contrasted the current situation with 2022, stating that the sharp depreciation of the rupee at that time was due to domestic economic challenges specific to Sri Lanka, whereas the present depreciation is linked to external global market pressures.

He further noted that interpreting economic strength solely based on exchange rate movements is misleading, as currency fluctuations alone do not reflect the full state of an economy.