A notable depreciation of exchange rate was observed since early March 2022.

The Sri Lanka rupee that remained around Rs. 202-203 per US dollar till early March 2022, depreciated thereafter, as a result of the measured adjustment that was allowed in the determination of the exchange rate in the first week of March 2022.

The subsequent market adjustment due to heightened pressure in the domestic foreign exchange market resulted in an overshooting of the exchange rate. Accordingly, during the year up to 12 May 2022, the rupee recorded a depreciation of 44.3 per cent against the US dollar.

Meanwhile, reflecting cross-currency movements, the Sri Lanka rupee depreciated against the euro, the pound sterling, the Japanese yen, the Australian dollar, and the Indian rupee during the year
up to 12 May 2022.