Rupee depreciation unusual
View(s):The Sri Lankan rupee, which has depreciated by almost 20 per cent against the US dollar this year, is heading for uncertain territory in the first few weeks of January 2019.
Money brokers said that the first few weeks will decide the movement of the rupee which tumbled this week (December 24-28) to 183.35 per dollar from 181. The sharp appreciation of the dollar was unexpected since seasonal demand was over and outflows from the equity and money markets have subsided.
Next year will be a challenging one with US$4 billion required to be raised as annual debt payments. When inflows come in through borrowing however, it would be transferred to foreign exchange reserves and then used to pay outstanding bills. The next big issue in the rapid depreciation of the rupee is when it hits 200 per US dollar, brokers said.