Sri Lankan Rupee Seen Rebounding 3% to 320 per Dollar by Year-End

2 articles · Updated · Bloomberg · May 25

BMI forecasts the Sri Lankan rupee will strengthen to 320 per dollar by the end of 2026, a gain of more than 3% from Monday’s level after its recent slide.
Oil prices are expected to ease as the Iran war likely ends by June, reducing pressure on Sri Lanka’s import bill and supporting the currency.
Higher central bank interest rates should also help stabilize the rupee, while BMI says a renewed balance-of-payments crisis is unlikely.
That combination limits the risk of another sharp depreciation and underpins BMI’s view that the rupee can recover through year-end.

With oil prices surging and the Iran war unresolved, is the optimistic forecast for Sri Lanka's rupee now obsolete?

How can Sri Lanka's central bank defend its currency when the global economic assumptions for its recovery are collapsing?