Sri Lanka may end forex interventions by May: CB Governor

Apr 03, 2012 (LBO) - Sri Lanka expects to end all interventions in forex markets by end May with forex sales for oil payments already less than planned, Central Bank Governor Nivard Cabraal said. "We haven’t committed to exactly when interventions will end," Governor Cabraal said.

"The need for intervention is already less than we have expected. We are expecting that interventions will be less.

"It is likely that from end-May there would be no need for further interventions."

Cabraal said the rupee is expected to "strengthen from current levels" after demand for imports for an upcoming New Year season in April ends.

Strong Signal

The IMF said Tuesday it was releasing 426 million US dollars to show up reserves, with its program back on track.

With the disbursement of the current tranche, Sri Lanka would have received 2,130 million US dollars from the IMF, the Central Bank said.

"Of course our turnaround has already begun," Cabraal said. "Our reserves by end March were already higher than by end of February.

"There were substantially less interventions for oil that we expected in March and there were sufficient dollars from the market.