Five prominent export associations have issued a collective call to address the significant challenges arising from the strengthening of the Sri Lankan rupee against the US dollar.
Highlighting concerns over additional hurdles such as restrictions on foreign currency movement and mandatory conversion of export earnings into local currency, the Exporters Association of Sri Lanka, Joint Apparel Association Forum of Sri Lanka, National Chamber of Exporters, Tea Exporters Association, and Sri Lanka Association of Manufacturers and Exporters of Rubber Products have voiced their apprehensions.
According to the associations, the appreciation of the rupee adversely impacts the competitiveness of Sri Lankan goods in the global market, as it makes exports more expensive for international buyers. They noted that the exchange rate, which surged to over Rs.364 per US dollar in May 2022, led to increased operational costs and necessitated adjustments in response to higher inflation within the country.
Expressing further concern, the associations highlighted the rapid appreciation of the rupee, with rates dropping below Rs.300 per US dollar since March 19. They cautioned that this trend jeopardizes the sustainability of businesses and the livelihoods of employees.
Despite the strengthening of the rupee, the cost of living in Sri Lanka remains high, placing continued pressure on worker wages, the associations emphasized. This appreciation comes at a time of weak global demand for most merchandise exports and intense competition from rival nations.
