Deputy Finance Minister Anil Jayantha Fernando told Parliament today (19) that the recent depreciation pressure on the Sri Lankan Rupee was largely driven by global uncertainty, geopolitical tensions in the Middle East, rising oil prices and increased demand for the US Dollar.
Responding to concerns raised by Opposition Leader Sajith Premadasa on the continued weakening of the Rupee, Anil Jayantha said the currency had faced pressure amid external shocks and market behaviour.
He said that as of May 18, 2026, the Rupee had depreciated by around 4.8% against the US Dollar, but argued that the decline remained comparatively lower than that of several countries in the region.
The Deputy Minister said the strengthening of the US Dollar due to Middle East tensions, investors shifting towards safer assets, rising crude oil prices, and uncertainty in global financial markets had all contributed to the pressure on the Rupee.
He further said the escalation of Middle East conflicts had affected Sri Lanka’s tourism sector due to disruptions at key regional aviation hubs, while importer demand for foreign exchange and market speculation had also added pressure.
Anil Jayantha noted that exporters delaying the conversion of export earnings and importers increasing foreign exchange purchases in anticipation of further depreciation had contributed to market pressures.
He also said the Central Bank does not target a fixed exchange rate and currently follows a flexible exchange rate policy, where rates are determined by market demand and supply.
“The current movement should not be viewed as an unusual volatility situation. Exchange rate fluctuations can have both advantages and disadvantages,” he said. (Newswire)