Central Bank makes U - turn

The Central Bank will now allow banks and exporters to hold on to dollars. Acting upon a cabinet decision the central bank made it mandatory for banks and exporters to convert 25 percent of their dollar earnings into rupees.

 

The u-turn had to be taken to prevent the dollar from further slipping and it was anticipated that the dollar will depreciate beyond the LKR 200 limit.

 
However, the rupee trawled back to Rs.198 on Friday after the Central Bank changed its mind.

 

Now the Central Bank has suspended two circulars, one directing banks to sell 10 percent of worker remittances to the Central Bank and the other that 50 percent of export earnings should be sold to the Central Bank.
Bankers and exporters say that this is a great relief to survive in a competitive market.