The Sri Lankan rupee, which remained broadly stable in the month of January as well as until the first week of March, depreciated sharply with the speculative behaviour in the market with the spread of COVID-19 outbreak.

Accordingly, the rupee has recorded a depreciation of 4.7% against the US dollar by 30 March 2020, latest External Sector Performance report of the Central Bank of Sri Lanka outlines.

Reflecting cross-currency movements, the rupee depreciated against the US dollar, the euro and the Japanese yen while appreciating against the pound sterling, the Canadian dollar, the Australian dollar and the Indian rupee during the year up to 30 March 2020.

Meanwhile, According to the Central Bank of Sri Lanka (CBSL) the current selling rate of the US Dollar today (30) stands at Rs. 192.50 and buying rate of the US dollar stands at Rs. 182.60.

In this backdrop, The Central Bank of Sri Lanka introduced urgent measures to ease the pressure on the exchange rate and prevent financial market panic due to the COVID-19 pandemic.

Accordingly, licensed commercial banks and National Savings Bank are directed to adopt the following measures during the next three months, with immediate effect:

• Suspend facilitating importation of all types motor vehicles, other than those excluded specifically under Banking Act Directions No.01 of 2020, under Letters of Credit
• Suspend facilitating importation of non-essential goods specified in Banking Act Directions No.01 of 2020, under Letters of Credit, Documents Against Acceptance and Advance Payment
• Suspend the purchase of Sri Lanka International Sovereign Bonds by licensed banks in Sri Lanka

In addition, Authorised Dealers of foreign exchange are allowed to issue foreign currency notes as travel allowance only up to a maximum of USD 5,000 (or its equivalent in other foreign currency).

The Central Bank will continue to monitor market developments and take further measures as required, while ensuring adequate liquidity in the market in order to facilitate smooth operations and sustain market confidence amidst the COVID-19 outbreak.