The rupee will move in both directions and will not be a “one-way bet” under a flexible exchange rate regime, Economynext has quoted Central Bank Governor Nandalal Weerasinghe as saying Banks are now collecting dollars to cover their positions on a debt exchange, Governor Weerasinghe told a forum organized by Chartered Financial Analysts Society in Sri Lanka, according to an Economynext report.

“That is why the dollar is going up,” he said. “It can move both ways.”

Recent predictions that the rupee will go to 400 had not occurred, he said.The rupee appreciated to around 295 to the US dollar and has fallen to around 325 to the US dollar, so far, after once falling to 320, and appreciating back towards 300.

Sri Lanka is operating a ‘flexible exchange rate’ with minimal interventions, he said.Wide fluctuations in the rupee had widened spreads, but they may come down later as activity improves, he said.