Bloomberg - A slide in the Sri Lankan rupee, Asia’s worst performing currency this month, has intensified due to speculation of further weakening, according to Deputy Minister of Finance Anil Jayantha Fernando.

Importers are buying more dollars and exporters are delaying conversion of their foreign-currency earnings, Fernando told parliament in Colombo on Tuesday. The South Asian nation has also seen outflows from government securities and the stock market, he said.

The rupee has fallen 4.6% this month, the biggest loser in Asia, as the nation’s fuel import bill surged six-fold since the start of the Iran war. The central bank is intervening when necessary to contain volatility in the foreign-exchange market, the Daily FT reported Tuesday, citing Governor Nandalal Weerasinghe.

“The end of the war will help restore some confidence in markets. But we do not really know when it will end,” said Dhananath Fernando, chief executive officer at Advocata Institute, a Colombo-based think tank. “In the past, this type of depreciation episodes, with or without external shocks, have not been contained without draining liquidity and tightening monetary policy.”

The rupee slumped 1.2% to 334.52 per dollar on Wednesday, the lowest since March 2023, according to Bloomberg-compiled data.

The country has taken steps to stem the slide in currency, including a 50% import duty surcharge on private vehicles for three months, fuel rationing and higher electricity tariffs.