Sri Lankan rupee weaker on importer dollar demand in dull trade

COLOMBO: The Sri Lankan rupee edged down on Monday in dull trade as dollar demand from importers outpaced exporter selling and inward remittance of the U.S. currency, traders said.

Rupee forwards were active, with spot-next forwards trading at 152.90/95 per dollar at 0631 GMT, compared with Friday's close of 152.85/95.

One-week forwards were at 153.05/20, compared with the previous close of 153.00/10.

Dealers said the rupee could be pressured if floods and landslides impact the island nation's export crops.

Sri Lankan authorities warned of more rains and landslides on Monday as a cyclone formed in the Bay of Bengal after floods killed 164 people following the heaviest showers in 14 years.

"If the floods have an adverse impact on agricultural exports, it could put pressure on the rupee," said a currency dealer asking not to be named.

"Floods also could pressure the overall GDP and government budget deficit with high infrastructure spending."

Dealers said the rupee has been under pressure after the central bank governor on May 18 said that the bank would allow  gradual depreciation of the currency.

The spot rupee did not trade on Monday.

The central bank fixed the spot rupee reference rate at 152.50 on May 5.

Sri Lankan shares were down 0.2 percent at 6,684.67, as of 0638 GMT. Turnover stood at 126.3 million rupees ($827,654.00).