money

Sri Lanka Central Bank has received 1.1 billion dollars from the Reserve Bank of India under the currency swap agreement between the two reserve banks.

Consequent to the signing of a special currency swap agreement for $1.1 billion (approximately Rs 7,278.7 crore) by the Central Bank of Sri Lanka (CBSL) with the Reserve Bank of India on 17 July 2015, the CBSL has received $1.1 billion, a statement said.

This is in addition to the $400 million received in April 2015, the bank added.

With the enhanced level of official reserves, the CBSL expects that the exchange rate would stabilise in line with sound macro economic fundamentals and movements of other currencies of major trading partners .

In a related development, the central bank has allowed the rupee to float from Friday by not quoting a specific rate in the market. The rupee exchange rate had eased to 134.75 rupees to the US dollar on Thursday.

The central bank will allow the market to decide the exchange rate by not guiding with a specific rate. The bank will intervene if the levels are too high Analysts say the rupee had fallen 2.7% so far this year due to increased imports.