The Sri Lankan Rupee has experienced significant volatility against the US Dollar over the past two months, marked by periods of sharp depreciation, brief appreciation, and subsequent reversals.
April's Decline and Early May Stability
At the beginning of April, the US Dollar's selling rate hovered around Rs. 318 from the 2nd to the 7th. A gradual increase saw it reach Rs. 319 by the 17th and Rs. 320 by the 22nd. By April 24th, the Central Bank of Sri Lanka (CBSL) recorded the selling price at Rs. 321.87. The downward trend persisted, with the US Dollar surpassing Rs. 322 by April 28th, marking a 1.8% depreciation. On April 29th, the general selling rate held at Rs. 322, though some commercial banks like Seylan Bank and NDB Bank reported slightly higher figures of Rs. 322.85 and Rs. 322.75, respectively.
A brief respite was observed on May 2nd, with the CBSL reporting a slight appreciation, bringing the selling rate to Rs. 323.80. However, this was short-lived, as the US Dollar selling rate remained steady at Rs. 323 across commercial banks through May 4th to 6th, despite minor fluctuations.
Mid-May's Accelerated Depreciation
The depreciation accelerated significantly in mid-May. By May 11th and 12th, the selling rate consistently reached Rs. 325. It rose further to Rs. 327 on May 13th, and by May 14th, some banks reported rates as high as Rs. 330, with the CBSL recording Rs. 329.92 – its highest level since December 27, 2023.
By May 15th, the selling rate edged towards Rs. 332, with the CBSL confirming Rs. 331.1572, the highest since December 22, 2023. A minor appreciation was noted on May 16th, with the CBSL selling rate at Rs. 331.15. However, the Rupee's decline resumed sharply, with the selling rate jumping to Rs. 334 across commercial banks on May 18th, and the CBSL reporting Rs. 334.26.
Peak Depreciation and Subsequent Reversal in Late May
The most substantial depreciation occurred on May 19th, with the US Dollar's selling rate surging to Rs. 340 in some commercial banks. The CBSL's selling rate increased by Rs. 4 to Rs. 338.07. The depreciation continued into May 20th, with the CBSL reporting a selling rate of Rs. 342.70, and commercial banks like Seylan Bank and NDB Bank reaching Rs. 345.50 and Rs. 345, respectively.
On May 21st, the Rupee depreciated further, with the selling rate crossing Rs. 350 across commercial banks, and NDB Bank's selling rate reaching Rs. 354. The CBSL reported a selling rate of Rs. 354.03, an increase of Rs. 11 from the previous day, marking the peak of this depreciation cycle. By May 22nd, while still above Rs. 350, a slight appreciation was observed.
However, a significant reversal began on May 22nd, with commercial banks lowering their selling rates to around Rs. 340. This appreciation continued through May 25th, with selling rates falling as low as Rs. 330 in some banks, and further to Rs. 326.00 by May 26th.
Renewed Depreciation in Late May and Early June
The trend reversed again on May 27th, as the Rupee depreciated. By May 29th, the CBSL reported a Rs. 4 jump in its selling rate, increasing from Rs. 330.81 to Rs. 334.24. This depreciation continued into June. On June 1st, the CBSL selling rate rose to Rs. 335.70, and commercial banks also saw upward adjustments, with Seylan Bank's selling rate reaching Rs. 337 and NDB Bank's Rs. 335.
The depreciation persisted on June 2nd, with the CBSL selling rate increasing to Rs. 336.60. On June 3rd, it further climbed to Rs. 337.97, and by June 4th, the CBSL reported a selling rate of Rs. 340.25, with some commercial banks reaching Rs. 342.00.
Recent Appreciation on June 10th
Most recently, on June 10th, the Sri Lankan Rupee experienced a significant appreciation against the US Dollar. The CBSL reported a drop in the selling rate by Rs. 7 to Rs. 335.39 (from Rs. 342.08). Commercial banks also reflected this trend, with Seylan Bank's selling rate decreasing to Rs. 336.00. The Rupee also appreciated significantly against a basket of other major foreign currencies, including the Australian and Canadian Dollars, the Euro, the Sterling Pound, and the Swiss Franc, though it depreciated against Gulf currencies during some periods of this volatile journey.