The Central Bank of Sri Lanka (CBSL) will continue to allow greater flexibility in determining the exchange rate based on market forces and will allow the exchange rate to act as the shock absorber in the envisaged monetary policy framework.Accordingly, Central Bank’s intervention in the domestic foreign exchange market will be limited only to curtail any excessive volatility in the exchange rate.
Moreover, the continuation of the EFF programme with the IMF is likely to be instrumental in supporting external sector stability in the medium term. A sustained improvement in the external sector however, requires policies aimed at promoting domestic production and export of goods and services and inflows of the non-debt-creating type,” Central Bank Governor Prof. W.D Lakshman told the launching ceremony of CBSL’S roamap for 2020 held in Colombo this week.