Former Central Bank Governor Ajith Nivard Cabraal yesterday clarified the background of the decision to provide greater flexibility in the exchange rate as announced by the Central Bank on March 7,2022.
The former Central Bank Governor said that the Monetary Board decided to allow the market to have a greater flexibility in the exchange rate with immediate effect and communicate that the Central Bank is of the view that forex transactions would take place at levels which are not more than Rs.230 per US dollar.
“In that regard, it is to be noted that the Monetary Board decided on March 7, 2022 to “allow the market to have a greater flexibility in the exchange rate with immediate effect and communicate that the Central Bank is of the view that forex transactions would take place at levels which are not more than Rs.230 per US dollar,” the statement said.
He added that an announcement was made to the media on the same day in line with the this decision.
“From the above it will be clear that, while the Monetary Board had, as a market guidance, expressed its “view” as to the level at which forex transactions would take place, a clear decision had been taken to allow for the flexibility of the Sri Lankan Rupee in the Forex market”.
“It would also be noted that from April 8, 2022 onwards, the Monetary Board under the new Governor and new Secretary, Treasury have continued with the above exchange rate policy, without fixing a specified exchange rate, as was the case immediately prior to March 7,2022”, he said in the statement.
COURTESY DAILYNEWS
