Sri Lankan rupee plunges to become worst performing currency in the world

 

08 April 2022

The Sri Lankan rupee has plunged to a record low and lags behind even Russia’s rouble, as a political and economic crisis grips the island.

The rupee now trades at over 300LKR to 1USD, a 32 per cent fall so far this year making it the worst performing currency in the world.

The fall comes as anti-government protests continues whilst embattled president Gotabaya Rajapaksa struggles to hold on to power.

Following the resignation of Ali Sabry, after holding the position of Finance Minister for a day, Sri Lanka's government has now appointed a new secretary to the Finance Ministry, Mahinda Siriwardena, and new Central Bank governor, Dr Nandalal Weerasinghe.

It remains unclear whether discussions with the IMF will take place.

“Things don’t look good. So much depends on whether they can get any IMF funding,” Steve Cochrane, chief Asia-Pacific economist at Moody’s told the Financial Times. “A stable government matters.”

“With the government in disarray, the prospects of securing an IMF package look bleak,” said Alex Holmes, Asia economist at Capital Economics. “That again elevates the chances that the government will eventually have to resort to a sovereign default”.

Read more from the Financial Times here.