Can You Explain Foreign Exchange Market In Sri Lanka?

According to central bank of Sri Lanka, the aim of Foreign Exchange Market in Sri Lanka is  to get foreign currency funds for buying the imports of goods and services. The foreign exchange market in Sri Lanka consists of spot market and forward market. In the spot market, foreign currency can be bought and sold at the spot while in the forward market settlements can be made at some future date. The foreign exchange market in Sri Lanka is based on two tiers, retail markets, inter-bank and client. Commercial banks in Sri Lanka act as authorized dealers of foreign exchange. In Sri Lanka, the floating exchange rate system was adopted in January 2001, therefore, the price of Sri Lankan Rupee is determined by the supply and demand of Rupee. Central Bank can intervene in foreign exchange market in Sri Lanka to avoid any excessive volatility in the exchange rate and to increase external reserves.