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) ✍️

The Korean Film Festival, now underway at the PVR Cinemas in Colombo, is more than a cinematic showcase — it’s a cultural bridge between South Korea and Sri Lanka, according to Korean ambassador to Sri Lanka, Miyon Lee.

Speaking to The Island Financial Review at the opening ceremony on Thursday ambassador Lee expressed hope that the event will spark greater appreciation for Korean entertainment and encourage lasting cultural exchanges.

“This Korean Festival will be able to bring Korean films, Korean entertainment and Korean arts to Sri Lanka. We hope that we will be able to have more cultural exchanges between Sri Lanka and Korea, ambassador Lee said.

The festival features two films — ‘Extreme Job’, a wildly popular action-comedy and ‘Myeongyang: The Roaring Currents’, a historical epic that depicts Admiral Yi Sun-sin’s legendary 16th-century naval victory. While modest in scale this year, the ambassador said the intention is to grow the event in the future.

“No, unfortunately this time it was very difficult to bring a lot of films. So this time we are going to have only one each, two films, she explained. “But we hope that now you have a very large scope of movie filmgoers and that PBR or Scope will be able to bring more Korean commercial and entertainment movies to show to the Korean–Sri Lankan filmgoers.”

Ambassador Lee, a self-professed history enthusiast, shared her personal appreciation for both films in the line-up.

“My favourite movie among the two? I love both of them. ‘Myeongyang’ is kind of a history mania, so I love all the history movies, she said. “Extreme Job is a really hilarious film — a police officer working undercover finally catches the drug dealers. It’s fun, full of emotion, drama, love stories and family morals. Our entertainment is not only about action — there’s meaning and universal messages for families and gatherings.”

The Korean entertainment industry, now a global force, did not emerge overnight, ambassador Lee emphasized. It grew through a mix of government support, global exposure and investment in talent and technology.

“The Korean entertainment industry did not develop in a short period. It has been developed with a lot of support from the people, the government, and also with talented Korean people going abroad, studying high-tech filmmaking techniques and expertise, she said. “They brought back a lot of content that is now enjoyed not only in Korea but also universally.”

When asked about Sri Lanka’s potential in film and entertainment, ambassador Lee acknowledged the country’s growing industry and highlighted the role of regional collaboration.

“There have been a lot of activities to bring in different Asian cultures and filmmakers to Korea. Korea annually hosts the Busan International Film Festival, which encourages a lot of Asian films that we never experienced before, she noted.

Beyond cinema, the ambassador underscored the multi-dimensional nature of Korea’s cultural outreach in Sri Lanka.

“Not only the films, but we also try to bring and introduce Korean cuisine, Korean dramas, K-pop, taekwondo and sports, she said. “Film is only one part of the activities that we do here in Sri Lanka. I want to meet and satisfy the eagerness and the demand for experiencing Korean culture here.”

Ambassador Lee also addressed the global success of Korean dramas, often referred to as K-dramas, which have captivated audiences from Latin America to the Middle East and beyond.

“Korean dramas are very popular worldwide. In Sri Lanka, we can really promote it more. But it takes effort, infrastructure, and importantly, government and industry support.”

She noted the potential for future collaborations between the Sri Lankan and Korean creative sectors and expressed optimism about deepening these ties.

“This is just a glimpse of Korean films. I hope that we’ll be able to import more Korean films here to be shown to a broader base of the Sri Lankan public. We have very excellent Korean directors, very international, the ambassador explained.

She cited the recent international visibility of Korean filmmakers, including the work ‘Mickey 17’ by acclaimed Korean director Bong Joon-ho, as an example of Korea’s growing global stature in entertainment.

As the Korean Film Festival continues this week at Scope Cinemas, audiences are expected to engage with a blend of laughter, action, history and humanity — the hallmarks of Korean storytelling.

By Ifham Nizam ✍️

The Commercial Bank of Ceylon has launched its first exclusive Women’s Banking Centre, managed by a dedicated team of female staff to serve female customers, reinforcing the Bank’s commitment to meeting the unique needs of women.

The centre named ‘Anagi Women’s Banking Centre’ was recently opened at the Jaffna branch, located at No 474, Hospital Road, Jaffna.

Designed specifically to cater to the needs of female customers, the Anagi Women’s Banking Centre features special amenities including a lactation room, children’s play area, dedicated pawning unit, counselling unit, cafeteria and provides the full range of financial products and services offered at any Commercial Bank branch.

Through this initiative, the Bank reaffirms its commitment to diversity, equity, and inclusion as well as its dedication to promote gender equality and empower women, the Bank said. The exclusive ‘Anagi Women’s Banking Centre’ aims to go beyond traditional banking by creating a unique environment specifically tailored to the needs, preferences, and challenges faced by women, while offering a comprehensive range of banking services.