<span style="color: #222222;">Starting today, Sri Lanka will stop a pre-announced guidance peg for the foreign exchange market. Sri Lanka had operated a guidance peg, fixed exchange rate, of around 360 to the US dollar with complementary monetary policy up to the last week of February.<br />''<br />''The central bank's purchases of dollars outpaced its sales in the last quarter due to the tight monetary stance.<br />''<br />''Earlier last week, guidance peg was pushed up from around 360 to 340 to the US dollar. The Lankan rupee had appreciated accordingly to a high of 334 against a dollar.<br />''<br />''Governor of Central Bank of Sri Lanka Dr. Nandalal Werrasinghe expressed hope that market will stabilise with sufficient liquidity and depth in the foreign exchange market from today.<br />''<br />''He added that whenever there is an opportunity, the central bank will buy Forex to build up the buffers. He said that the bank will operate ad-hoc pegs which fall under flexible exchange rate system where the bank would stabilise volatile movement by intervention.<br />''<br />''A currency peg is a policy in which a national government or central bank sets a fixed exchange rate for its currency with a foreign currency.</span><br />