State Minister for Finance, Ranjith Siyambalapitiya, announced on Friday that Sri Lanka’s rupee, which had faced significant depreciation due to the country’s unprecedented economic crisis since 2022, has begun to strengthen against other currencies.
During the first four months of the year, Siyambalapitiya stated that the Sri Lankan rupee appreciated by 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, 21 percent against the Yen, 9.5 percent against the Indian rupee, and 14.2 percent against the Australian dollar.
Amidst the economic downturn in early 2022, which resulted in Sri Lanka’s first-ever sovereign default, India stepped in to assist with imports of essential goods. The Reserve Bank of India’s extended currency swaps provided a boost to the Sri Lankan rupee.
This assistance from India, totaling over USD 4 billion, acted as a lifeline for the struggling economy until the agreement for an IMF bailout of USD 2.9 billion was finalized in March 2023.
Siyambalapitiya emphasized on Thursday that despite the default announced in 2022, Sri Lanka has maintained strict financial discipline, making unpopular decisions to facilitate economic recovery. The country has continued to service its multilateral debt, repaying USD 2.5 billion in 2022 and USD 2.6 billion in 2023 to organizations such as the International Monetary Fund (IMF), World Bank, and the Asian Development Bank. However, bilateral external debt payments were suspended with the announcement of the debt default in mid-2022.
“We have maintained strict financial discipline while making unpopular decisions to facilitate economic recovery,” Siyambalapitiya affirmed.
