'A currency that works for all: Why we need balance, not strength'

In the ongoing debate on Sri Lanka's currency direction, much of the noise focuses on the strength of the rupee. A stronger rupee, many argue, will ease import costs, tame inflation, and bring short-term consumer relief. While this narrative may be politically expedient, it risks overlooking the deeper structural consequences for Sri Lanka's export economy—the engine that earns our foreign exchange and sustains millions of livelihoods.

- BY THE JOINT APPAREL ASSOCIATION FORUM (JAAF)

The hard truth is this: an artificially strong rupee is not a sign of economic health. It is a distortion that may win applause from consumers in the short term, but at the devastating cost of export competitiveness, job creation, and long-term resilience.

Misaligned currency

Sri Lanka's export sector is not a small sideshow. It contributes over 20% of GDP, directly supports 1 in 4 jobs, and generated USD 16.17 billion in total export earnings in 2024, with merchandise exports contributing USD 12.77 billion and services USD 3.47 billion. Of this, the apparel industry alone accounts for nearly half of merchandise exports, employing over 350,000 people directly—the vast majority being women from rural communities.

When the rupee is overvalued beyond what market fundamentals dictate, Sri Lanka's exporters are forced to compete on global markets with inflated cost structures. Every artificially appreciated rupee erodes our margins, makes Sri Lankan goods less competitive, and undermines the viability of our factories and supply chains.