Dollar Flow

July 4, 2009 (LBO) - Sri Lanka's central bank has bought 390 million US dollars from forex markets in June to boost its foreign reserves, bringing the total purchases since a float of its currency in March to 450 million US dollars. The Central Bank floated the rupee in March as a prior action for an International Monetary Fund loan of 1.9 billion US dollars. The float ended a period of dollar peg defence that created a balance of payments crisis and cost the country more the 2.0 billion dollars in foreign reserves. Though the IMF loan has been delayed amid political wrangling by the United States and Britain as relations between Sri Lanka and the West took a dramatic downturn in the last stages of fighting with Tamil Tigers separatists. Governor Cabraal said last week that the loan was no longer urgent. "Let it come at the... [read full story]                    

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