Sri Lanka Central Bank Intervenes in FX Market to Boost Dollar Liquidity

2 articles · Updated · Bloomberg · May 26

Sri Lanka’s central bank stepped into the foreign-exchange market on Tuesday to increase dollar liquidity in the interbank market and slow what Governor Nandalal Weerasinghe called excessive rupee depreciation.
Dollar shortages had built up as importers sought more foreign currency, exporters held back sales, and banks kept inflows for their own clients instead of selling into the market.
The intervention is part of a broader set of measures aimed at easing pressure on the rupee by restoring trading liquidity rather than leaving banks to hoard scarce dollars.

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