Sri Lanka rupee hits record low as IMF discusses loan

(Reuters) – The Sri Lankan rupee fell to a record low of 133.60 against the dollar on Tuesday on importer demand for the U.S. currency as an IMF delegation went into a sixth day of discussions on the last tranche of a $2.6 billion loan.

“The highest trade was done at 133.60 to the dollar, though we saw only thin volume,” a currency dealer said. “We didn’t see intervention from the state banks or the central bank. Probably, their hands are tied due to the ongoing discussions with the IMF.”

Four dealers confirmed the rupee trading at 133.60, breaking the previous record of 133.00 reached on April 25.

The IMF review team held talks with top central bank and government officials on how the $59 billion economy is performing.

The IMF, which has long pressed the central bank to allow flexibility in the rupee exchange rate, is expected to release the last tranche of the loan – about $420 million – if it is satisfied with that performance.

The currency has depreciated 17.5 percent since Nov. 21, when the government allowed a 3 percent devaluation.

 

Reuters