Former Deputy Governor of the Central Bank of Sri Lanka, W. A. Wijewardena, has warned that recent rupee appreciation without supporting ground conditions will kill all exports.
Wijewardena stated on Twitter that this will kill all exports, not just rubber.
The former Central Bank Deputy Governor also warned that the rupee’s appreciation would disproportionately affect Sri Lankan migrant workers.
“As long as inflation remains at 95% from the base period, gains by importers will be lost overall,” he added.
Wijewardena’s warning comes after it was reported that the rupee’s appreciation had a significant impact on the local rubber sector in March.
It was reported that according to the Forbes & Walker commodity brokers, the strengthening of the Sri Lankan rupee has created uncertainty among buyers.
As a result, all the grades went unquoted during the March 8, 2023 sale. The price of L.CR 1Xs and 1s eased sharply from Rs.625 to Rs.500 whilst No. 2s declined and settled at around Rs.400 by the end of March.