Sri Lanka's central bank has bought hundreds of millions of dollars from commercial banks that raised loans abroad for rupees through swaps to give then foreign exchange risk protection, creating large volumes of rupees.
Analysts have also blamed large volumes of liquidity from swaps - which for all intents and purposes have the same effect of money printed by purchasing Treasury bills - for recent weaknesses in rupee."In effect these are large capital inflows. In some sense this is a very positive signal," John Nelmes, the head of an IMF mission said.
He also welcome the international investments in SriLanka but it's necessary to solve problems raised form these big investments.