The Sri Lankan rupee which has declined 4% against the dollar this year is the fifth worst performer among the world`s 180 currencies according to date compiled by the Bloomberg newswires.
The financial news service last week quoted Central Bank Governor Ajith Nivard Cabraal saying that the economy, growing now at the slowest pace in two years as a result renewed civil war, will quicken in the second half as inflation slows.
He was quoted saying that ``the easing inflation regime will help manage expenditure and the overall conditions in the country.`
Earlier this year (on April 30), the governor went on record saying that he expects inflation to slow to 9% by year end from a decade high of 20.5% in January.
Cabraal has told Bloomberg that if development takes off fast in the East following the eviction of the LTTE from that province, `we will see an impact (of that) in the second half.`
The governor was hopeful that with a forthcoming bond issue and foreign inflows could possibly be taken as a factor in estimating the exchange level.
Bloomberg reported that Sri Lanka, with the highest borrowing cost in Asia, has received bids from 14 banks and investment companies including Citigroup Inc. and Merrill Lynch and Company to manage its 400 million dollar overseas bonds here.