The Central Bank of Sri Lanka has allowed its currency to fall at a rapid pace on the demands of exporters. There is a demand from the exporters for depreciation of Sri Lankan rupee because their exports were affected by higher value of rupee. The depreciation of rupee would help exporters earn more in local currency if exports continue to increase.
Depreciating currency is not a good option because it would increase debt burden and increase import bill. The depreciation should be consistent with the exports.
The Central Bank of Sri Lanka has allowed its currency to fall at a rapid pace on the demands of exporters. There is a demand from the exporters for depreciation of Sri Lankan rupee because their exports were affected by higher value of rupee. The depreciation of rupee would help exporters earn more in local currency if exports continue to increase.
Depreciating currency is not a good option because it would increase debt burden and increase import bill. The depreciation should be consistent with the exports.
Related
