Sri Lanka widened the trading band for its currency for a second time this week, as policymakers sought to undertake a financial reform that’s needed to secure a bailout from the International Monetary Fund. The rupee jumped.
(Bloomberg) — Sri Lanka widened the trading band for its currency for a second time this week, as policymakers sought to undertake a financial reform that’s needed to secure a bailout from the International Monetary Fund. The rupee jumped.
The currency was allowed to trade at a maximum of 7.5 rupees from the middle rate effective Thursday, the central bank said on its website. The trading band, which was introduced in May, was widened to 5 rupees from 2.6 rupees on Monday. The currency surged 3% after the move.
A more market-determined exchange rate is a key condition by the Washington-based lender for a $2.9 billion bailout. The funding is crucial for Sri Lanka to revive an economy mired in a recession.
The rupee had slid 45% in 2022 as the nation defaulted on its sovereign debt.
–With assistance from Anusha Ondaatjie.
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