Recent analyst forecasts indicate a challenging outlook for the USD to LKR exchange rate. The US dollar has faced downward pressure amid concerns regarding the independence of the Federal Reserve, particularly following the recent confirmation of Stephen Miran, an ally of former President Trump. Analysts suggest that the looming prospect of rapid interest rate cuts could further diminish the dollar's value, especially as investors anticipate the Fed's next interest rate decision.
In the meantime, key factors affecting the USD include upcoming inflation data, which is expected to influence Federal Reserve policy. Trade tensions between the US and China may also play a role, as ongoing negotiations could impact US economic stability. Additionally, global efforts to shift away from the US dollar as a reserve currency, combined with plans like the Mar-a-Lago Accord aiming to reform dollar valuation, contribute to uncertainty surrounding the USD's strength.
For the Sri Lankan rupee, recent developments indicate a focus on sustaining economic reform following the IMF's substantial financial support. The World Bank's projection of a 3.5% growth rate for Sri Lanka in 2025 bolsters expectations for a stabilized economy, despite challenges posed by US tariffs on exports. The Central Bank's introduction of a single policy rate is seen as a strategic measure to enhance economic recovery, aligning tightly with ongoing discussions to attract foreign investment.
Currently, the USD to LKR exchange rate is trading near a 7-day low of approximately 301.7, hovering just above its three-month average. This reflects a relatively stable trading range of 2.0% over the past months, indicating a period of consolidation in the LKR’s value against the dollar. Analysts will be closely monitoring developments on both sides as they weigh the balance of these dynamic market factors affecting the exchange rate forecast for USD against LKR.
