The Sri Lankan rupee recorded a marginal depreciation against the US dollar during November 2020, with increased volatility from the middle of the month.

Reflecting cross-currency movements, the rupee depreciated against the euro, the pound sterling, the Japanese yen and the Australian dollar, while remaining stable against the Indian rupee in 2020.

The Central Bank (CB) said it continued its net purchases of foreign exchange from the domestic foreign exchange market in November 2020, which resulted in the CB absorbing US dollars 305 million on a net basis up to end November 2020.

A notable depreciation pressure was observed in December mainly driven by speculative market behaviour.

The CB said their timely action through appropriate intervention and moral suasion curbed the depreciation pressure, and the overall depreciation of the rupee was limited to 2.6 per cent against the US dollar in 2020.