The Sri Lankan rupee, which has seen significant fluctuations in the last few days, will stabilize soon after the market achieves equilibrium, an official from the central bank has said.

While there may be turbulence in exchange rates after the government relaxed exchange controls, the exchange rate will be stabilized soon with the improvement of market activities, said Anil Perera, director of the Department of Economic Research of the central bank, at a press conference on Friday.

"More foreign currency will come in, exports will be encouraged and imports will be discouraged. We will closely monitor the situation," said Perera.

Sri Lanka relaxed controls on currency earlier this week considering the severity of the external shocks and recent developments in the domestic front, with the rupee depreciating against the U.S. dollar by Friday.