The central bank will now allow the currency’s exchange rate to fluctuate, up to a maximum of 230 rupees for one US dollar. That is 15 percent less than today.
Sri Lanka has been hit hard by the corona pandemic. The island with 22 million inhabitants no longer received tourists, who were previously an important source of income. The shortage of money means that it is almost impossible to import goods, and there are therefore shortages of food, medicines, fuel … There are also regular power shortages and transport is heavily disrupted. Inflation peaks at almost 17 percent.
The government of Sri Lanka first tried to protect the currency, but due to the shortage of foreign exchange, it is now decided to devalue the rupee. This is also done on the advice of the IMF. He has also called for an increase in VAT.
On the black market there is already 260 rupees for 1 dollar.