Rupee is trading at a reasonable rate - Governor

Sri Lankan Rupee is trading at a reasonable rate and the Central Bank of Sri Lanka will continue to maintain a stable exchange rate, its Governor Ajith Nevad Cabraal said today. "Right now we think it is trading at a reasonable rate," the Governor was quoted as saying to Reuters. "We are comfortable with this rate and we have given that indication by purchasing dollars at this rate."

The rupee, expected to face buying pressure after the International Monetary Fund approved its $2.6 billion loan for Sri Lanka, held steady as a state bank through which the central bank steers the market bought dollars heavily at 114.90 rupees.The central bank has kept the currency steady at that rate for 10 weeks."When the rupee tried to appreciate further, we have intervened and been building up our reserves at the same time," Cabraal said.

The IMF's board on Friday approved its largest ever loan to the $40 billion economy to help Sri Lankacope with the global financial crisis and pay for reconstruction after a 25-year war. According to the letter of intentsent to the IMF, the government said the central bank intended to allow necessary flexibility in the exchange rate to build up international reserves to at least 3.5 months of imports by the end of the programme.