Business

‘A currency that works for all: Why we need balance, not strength’

Published

8 months ago

2025/06/21

In the ongoing debate on Sri Lanka’s currency direction, much of the noise focuses on the strength of the rupee. A stronger rupee, many argue, will ease import costs, tame inflation, and bring short-term consumer relief. While this narrative may be politically expedient, it risks overlooking the deeper structural consequences for Sri Lanka’s export economy—the engine that earns our foreign exchange and sustains millions of livelihoods.

The hard truth is this: an artificially strong rupee is not a sign of economic health. It is a distortion that may win applause from consumers in the short term, but at the devastating cost of export competitiveness, job creation, and long-term resilience.

Misaligned currency

Sri Lanka’s export sector is not a small sideshow. It contributes over 20% of GDP, directly supports 1 in 4 jobs, and generated USD 16.17 billion in total export earnings in 2024, with merchandise exports contributing USD 12.77 billion and services USD 3.47 billion. Of this, the apparel industry alone accounts for nearly half of merchandise exports, employing over 350,000 people directly—the vast majority being women from rural communities.

When the rupee is overvalued beyond what market fundamentals dictate, Sri Lanka’s exporters are forced to compete on global markets with inflated cost structures. Every artificially appreciated rupee erodes our margins, makes Sri Lankan goods less competitive, and undermines the viability of our factories and supply chains.

For apparel exporters, even a 1% appreciation of the rupee against the dollar can mean a margin compression of up to 3%, given the tight cost structures and price sensitivity of global buyers. Over time, this pushes orders to lower-cost competitor markets like Bangladesh, Vietnam, and Indonesia—all of whom maintain prudent, export-supportive currency regimes.

The situation is further complicated by the fact that the current level of the rupee is not a true reflection of Sri Lanka’s macroeconomic fundamentals. Much of the country’s external debt servicing remains temporarily suspended. Until those repayments recommence, the rupee remains artificially elevated, distorting price signals and export margins.

Balance over strength

No serious economy targets a ‘strong currency’ at all costs. Successful export-led economies—from China to Vietnam—aim for currency stability and competitiveness, ensuring their exporters have a level playing field.

For Sri Lanka, the goal should be no different. A market-reflective rupee that is aligned with our productivity levels, cost base, and external balances is essential for sustainable growth. This does not mean chasing devaluation recklessly, but resisting the temptation to prop up the currency using scarce reserves or distortionary policy interventions.

Moreover, the World Bank and IMF both caution that currency misalignment in fragile economies often leads to unsustainable balance of payments gaps, import surges, and eventual crises—a painful lesson Sri Lanka knows all too well.

A currency for everyone

At its core, the currency debate is not about exporters versus importers, or rural versus urban interests. It’s about ensuring that our economic fundamentals are healthy, balanced, and sustainable for all Sri Lankans.

A stable, market-driven rupee allows our exporters to remain competitive, ensures that our debts are manageable, and gives investors confidence. Over time, this builds the foreign reserves needed to moderate inflation, fund essential imports, and support social welfare.

Theoretically, a stronger rupee should reduce import costs and offer price relief to consumers. But in practice, this has not materialised. Prices of essentials and everyday goods have remained largely unchanged at the supermarket, suggesting that the currency strength has not trickled down to tangible household savings.

We need to move beyond the outdated obsession with currency ‘strength’ and focus instead on currency sustainability—one that works for exporters, consumers, businesses, and the economy as a whole.

In a country where exports must lead the recovery, we cannot afford a currency policy that ignores the very sectors that bring in the dollars.

By the Joint Apparel Association Forum (JAAF) ✍️

All News Advertisement

Business

Global Insurance leaders to converge in Colombo for MDRT Sri Lanka Day 2026

Published

6 hours ago

2026/02/1

Thilina Walpola

In a first for Sri Lanka’s insurance industry, the country will host MDRT Sri Lanka Day 2026, also known as International Insurance Day, bringing together global leaders, professionals and organisations from the international financial services and insurance sectors.

The initiative, organised by the Million Dollar Round Table (MDRT), will mark Sri Lanka’s inaugural MDRT Day and is scheduled to be held on 18 May 2026.

MDRT Country Chair – Sri Lanka, Lahiru Maduranga, said the event would provide a significant opportunity to position Sri Lanka on the global insurance and financial services map.

“This is an excellent opportunity for Sri Lanka to host such a prestigious event and to promote the country’s standing globally,” Maduranga said.

He made these remarks at the official sundown launch announcing the event, held on 26 January at 8 Degrees on the Lake, Cinnamon Lakeside, Colombo.

The launch was attended by the Chairman and Director General of the Insurance Regulatory Commission of Sri Lanka, chief executive officers of insurance companies, and regional and zonal chairs of MDRT, at which the official date of MDRT Sri Lanka Day 2026 was unveiled.

Maduranga said the landmark event aims to bring the spirit and experience of the MDRT Annual Meeting to the Sri Lankan MDRT community. The programme will feature the MDRT President, Executive Committee members and internationally renowned speakers, offering world-class insights, inspiration and professional development aligned with MDRT values.

He noted that many Sri Lankan MDRT members face challenges in attending the Annual Meeting overseas due to foreign exchange constraints and visa limitations. Of more than 1,200 MDRT achievers in Sri Lanka, only around 50 were able to attend the Annual Meeting in the United States.

“This initiative marks a significant step forward in strengthening the MDRT culture in Sri Lanka and in elevating professional standards within the local insurance services sector,” Maduranga said.

The MDRT Membership Communication Committee (MCC) serves as the official liaison between MDRT Headquarters in the United States and the Sri Lankan MDRT community, overseeing communication, engagement and coordination with the local financial services sector.

Founded in 1927 in the United States, the Million Dollar Round Table (MDRT) is the world’s most prestigious association of insurance and financial services professionals. MDRT represents the highest standards of professional excellence, ethics and performance in the industry. Its Annual Meeting, traditionally held in the United States, attracts more than 10,000 top-performing members from around the world each year.

By Hiran H Senewiratne

Business

ESOFT UNI Kandy leads the charge in promoting rugby among private universities

Published

6 hours ago

2026/02/1

Thilina Walpola

With the aim of fostering a passion for rugby among students in private universities and higher education institutes across Sri Lanka, ESOFT UNI Kandy has launched a special sports development initiative.

As a part of this program, a series of rugby encounters were recently organized between the ESOFT UNI Kandy rugby team and the SLIIT Kandy Uni rugby team. The matches were held at the Peradeniya University Rugby Grounds.

Two highly competitive matches were played during the event. In the first game, the ESOFT UNI Kandy rugby team secured a victory over SLIIT Kandy Uni with a score of 17-07. They maintained their winning streak in the second match as well, defeating their opponents with a final score of 12-07.

This initiative is seen as a significant step toward building a robust sporting culture within the private higher education sector in the hill capital.

The initiation has been started with Rugby and will soon be extended to Cricket, Football, Martial Arts, Badminton, Hockey, Chess, and other areas of sports as well. ESU believes that the development of soft skills, parallel to higher education, will help shape highly capable, industry-ready, and employable students who can confidently face any personal and professional challenges they encounter during their journey.

Dimuthu Thammitage, General Manager, ESU Central Region said: Today’s job market demands highly employable individuals who possess not only educational qualifications but also strong soft skills, which can be effectively developed through sports. Therefore, we warmly invite other educational institutions to join hands with us in producing highly employable students together through sports.

Lakpriya Weerasinghe, Deputy General Manager, ESU Kandy said: At ESOFT Uni, we believe that sports play a vital role in improving students’ personalities through the development of essential soft skills. Therefore, we encourage our students to actively join our clubs and enhance their soft skills alongside their academic education.

Oshara Chamod Bandara, MIC Rugby Club, ESU Kandy said: Sports are iconic to Kandy. As the MIC of the ESU Kandy Rugby Team, I am truly happy to see the enthusiasm of our students towards sports while actively engaging in their studies. I warmly invite other students to join our clubs and further develop their skills alongside their academic journey.

Text and Pix By S.K. Samaranayake

Business

Altair issues over 100+ title deeds post ownership change

Published

6 hours ago

2026/02/1

Thilina Walpola

Altair Residences have, over the past six months, seen more than 100 individual title deeds being executed by apartment owners, providing owners with a clear, registered, legal title to their apartments in accordance with Sri Lankan property law. This has been a key initiative by the new owners and management of Altair to improve governance and will continue in an orderly manner in the coming months.

With the transition of ownership to Blackstone India, Altair’s Management Council has also been formally constituted, enabling owners to play an active and proactive role in the management of the Altair building. In addition, the management council has appointed Realty Management Services (RMS), a subsidiary of Overseas Realty Ceylon PLC, as the new facility manager of Altair.

Commenting on these milestones, Thilan Wijesinghe, Chairman of TWC Holdings, who, together with a team from TWC, represents Blackstone’s interests in Sri Lanka, said, “The issuance of individual title deeds is a critical step in any professionally developed residential asset. Over the past six months, this process at Altair has moved forward in a structured and transparent manner, alongside the formal establishment of owner-led governance. This, combined with the appointment of experienced facility managers are fundamental building block for long-term value-creation for apartment owners and proper asset stewardship.”

With ongoing improvements to the building being undertaken by Indocean Developers Pvt Ltd (IDPL), the owning company of Altair, the issuance of deeds to owners is expected to accelerate over the coming months.