Sri Lanka’s rupee, which suffered severe depreciation because of the island nation’s unprecedented economic crisis since 2022, has started to make gains in comparison to other currencies, State Minister for Finance Ranjith Siyambalapitiya said on Friday.

He said during the first four months of the year, the Sri Lankan rupee had appreciated by 9.1 per cent against the US dollar, 12.7 per cent against the Euro, 10.8 per cent against the UK pound, 11.4 per cent against the Chinese Yuan, 21 per cent against the Yen, 9.5 per cent against the Indian rupee and 14.2 per cent against the Australian dollar.

When the Sri Lankan economy slumped during the first quarter of 2022, which led to the announcement of its first-ever sovereign default, Sri Lanka was assisted by India for imports of essentials. The Sri Lankan rupee was boosted by the Reserve Bank of India’s extended currency swaps.

The Indian assistance was worth over USD 4 billion which provided a lifeline to the ailing economy until the deal for an IMF bailout of USD 2.9 billion was sealed in March 2023.

Siyambalapitiya on Thursday said the country has maintained strict financial discipline while taking unpopular decisions to facilitate economic recovery and continues to service its multilateral debt despite the default announced in 2022.

He said USD 2.5 billion debt in 2022 and USD 2.6 billion debt in 2023 had been repaid to multilaterals such as the International Monetary Fund (IMF), World Bank and the Asian Development Bank. Only the bilateral external debt payments had been suspended with the announcement of the debt default in mid-2022.

“We have maintained strict financial discipline while taking unpopular decisions to facilitate economic recovery,” Siyambalapitiya said.