The rupee traded at an all-time low of 183.00 hit on Monday against the dollar before ending at 182.80/183.00 per dollar, compared with 182.70/90 in the previous session, market sources said. The local currency has weakened about 5.4 percent since Sri Lanka's political crisis began on Oct. 26.
The country's central bank will continue to adopt an exchange rate policy, with cautious interventions at times of excessive volatility in the forex market, central bank chief Indrajit Coomaraswamy said on Wednesday, launching 2019's economic policies. The policy is designed to maintain the competitiveness of the exchange rate and support the rebalancing of the current account, thereby supporting a gradual buildup of foreign exchange reserves as an external buffer, he added.
President Maithripala Sirisena appointed a cabinet of ministers from his rival party on December 21 after he was forced to reinstate Ranil Wickremeinghe as prime minister, 51 days after he was sacked. The political crisis is expected to ease, though uneasy relations between the two men could cause fiscal problems, analysts have said. Parliament has approved 1.77 trillion rupees ($9.39 billion) to meet the first four months of expenditures in 2019 and avert a government shutdown from January 1.