Sri Lanka tightens import rules to save rupee
Afp, Colombo
Sri Lanka announced on Friday new restrictions on imports in a bid to halt the fall of its currency and stem an outflow of foreign exchange amid spiralling ethnic violence in the island nation. The Central Bank of Sri Lanka banned commercial banks from loaning money to import "non-essential items" as the rupee tumbled to a record low this week against the dollar amid strong demand for the US currency from importers. The rupee sank to an all-time low of 107.65 against the dollar on Tuesday, after Tamil Tiger suicide bombers hit a naval convoy the previous day killing 115 people, mostly sailors. The local currency had clawed back to 106.50 against the dollar Friday, after the Central Bank threatened to get tough with dealers who it said were "excessively speculating" on the foreign exchange market.
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