The Sri Lankan rupee fell on Thursday in dull trade, snapping four consecutive sessions of gains, as importer dollar demand surpassed greenback sales by exporters, dealers said. Rupee forwards were active with two-week forwards ending at 151.90/152.00 per dollar, compared with Wednesday's close of 151.70/80.
Foreign investors sold a net 15.37 billion rupees ($101.62 million) of government securities in the week ended February 22, extending the outflow from such instruments to 64.5 billion rupees. The rupee has weakened 1 percent so far this year. It fell 3.9 percent last year, following a 10 percent drop in 2015. "There was light importer demand, and the rupee ended weaker in light trade," said a currency dealer on condition of anonymity.
Sentiment was also negative after ratings agency Moody's said in a report that lower agricultural exports and higher imports to substitute for the loss in domestic production will weigh on current account deficit and foreign exchange reserve, a key constraint to the country's credit quality. The government's handouts for farming families affected by drought could make the fiscal deficit target a challenge, Moody's added.
Comments
Comments are closed for this article.