Sri Lanka widened the trading band for its currency for a second time this week, as policymakers sought to undertake a financial reform needed to secure a bailout from the International Monetary Fund, Bloomberg has reported.
As a result of this the rupee has appreciated, according to Bloomberg.The Central Bank of Sri Lanka said that the rupee had been allowed to trade at a maximum of 7.5 rupees from the middle rate effective Thursday. The trading band, which was introduced in May, was widened to 5 rupees from 2.6 rupees on Monday. The currency surged 3 percent after the move, Bloomberg reported.
A more market-determined exchange rate is a key condition by the Washington-based lender for a 2.9 billion U.S dollar bailout, Bloomberg reported.The rupee slid 45 percent in 2022 as the nation defaulted on its sovereign debt.