The recent performance of the USD to LKR exchange rate reflects various dynamics impacting both currencies. Analysts note that the U.S. dollar has slipped amidst a positive risk sentiment, following U.S. President Trump's signing of a funding bill that eased government shutdown concerns. The upcoming release of U.S. economic data, including inflation reports, may further dictate short-term fluctuations in USD valuation. Speculation around Federal Reserve leadership and interest rate decisions, influenced by rising inflation expectations, could also play a key role.
In contrast, the Sri Lankan Rupee has faced challenges after experiencing a depreciation of 1.7% against the U.S. dollar in early 2025. The Central Bank of Sri Lanka has been proactively intervening in the currency market to stabilize the LKR, purchasing U.S. dollars to mitigate depreciation pressures. Despite these efforts, forecasters warn that future depreciation remains a risk if foreign inflows do not sufficiently counterbalance outflows.
Current analyses establish that the USD to LKR rate is trading near 90-day highs at approximately 305.5, slightly above its three-month average of 302.7. The exchange rate has shown stability within a narrow range of 2.3% from 298.5 to 305.5, indicating a degree of resilience amid global uncertainties.
Valuation experts suggest keeping an eye on global economic trends, the trajectory of U.S. dollar policy, and local economic indicators in Sri Lanka, such as current account health and foreign investment inflows. These elements will be crucial in navigating the exchange rate landscape and optimizing currency transactions effectively.
