Ceylon Chamber welcomes devaluation of rupee

The Ceylon Chamber of Commerce on Tuesday commended the Governor and his team at Central Bank of Sri Lanka (CB) for permitting greater flexibility in the exchange rate, devaluing the rupee to a maximum of Rs.230 against Rs.203 earlier.

The Central Bank on Monday night, bowing to repeated requests from industry, commerce and experts, devalued the rupee pegging it to an upper limit of Rs, 230 to the dollar.

“This action has been proposed by the Ceylon Chamber, on its own and along with other chambers on numerous occasions in the recent past. Hence, the chamber is pleased to note this announcement by CB and believes that it will contribute significantly to ease the shortage of dollars currently experienced,” the chamber said in a media release.

This, along with the move to increase the additional incentive offered to migrant workers should help to attract more remittances from this category, reversing the sharp drop in inflows seen from this source in recent months. In addition, a more market oriented exchange rate will also enable both export and tourism sectors to become more competitive while protecting their margins against escalating costs. Further, it should also discourage unnecessary imports easing the pressure on foreign currency reserves, the chamber said.

At the same time, the Ceylon Chamber of Commerce hopes that the Government will favourably consider the other recommendations made by the Joint Chambers such as introducing market driven pricing for fuel, gas and electricity, commencing a pre-emptive debt restructuring process and engagement with IMF.