Harsha de Silva warns of rising pressure on Rupee amid weak market confidence

Opposition MP Dr. Harsha de Silva has expressed concern over the recent depreciation of the Sri Lankan rupee, warning that weakening confidence in the government’s economic management could place further strain on the currency.

Commenting on the current economic conditions, Dr. de Silva said the US dollar has risen to around Rs. 342, while unofficial market rates are reportedly exceeding Rs. 345.

He noted that currency movements are largely driven by market confidence and claimed that confidence in the government’s ability to stabilise the rupee is gradually declining.

Dr. de Silva further stated that recent policy actions, including an increase in interest rates, had only provided short-term relief before the rupee resumed its downward trend.

He also highlighted increasing demand for foreign exchange as importers begin settling Letters of Credit (LCs) that were opened prior to the introduction of tighter controls.

According to him, some Sri Lankans living abroad are delaying remittances in expectation of further depreciation, while certain exporters are also withholding export earnings for the same reason.