Economists believe that while the stronger rupee has benefits, it also presents significant challenges for several sectors, necessitating a balanced approach by the CB to ensure economic stability. The rise in the rupee’s value against the dollar has led to a reduction in inflation, lower import costs, and a decrease in the burden of foreign debt for Sri Lanka.

These factors help stabilise the economy by making imported goods more affordable, thereby reducing production costs for local businesses. This can translate into lower consumer prices, enhancing purchasing power and overall economic stability.

Additionally, a stronger rupee boosts investor confidence, as it signals a stable economic environment. A stronger rupee makes Sri Lankan exports, like garments, tea, and rubber, more expensive in international markets, reducing their competitiveness