COLOMBO: The Sri Lankan rupee traded weaker at a near 1-year low against the dollar on Tuesday on importer demand for dollars and renewed selling of government bonds by foreign investors.
Dealers said banks again had to trade in the short-term forward market in the absence of an active spot-dollar market, as the central bank had discouraged state banks from trading the spot rupee beyond 132 to the dollar.
The spot rupee fell to 132.90 per dollar in early trade, Thomson Reuters data showed, its lowest since Sept. 14.
The spot next or one-day forward traded at 133.05/10 per dollar at 0646 GMT, weaker from Monday's close of 132.75/85.
Dealers expect the local currency to depreciate further unless strong dollar inflows come into the market or the central bank intervenes to curb the dollar's rise.
Last week, the central bank said it would intervene when there was excessive market volatility.
Sri Lanka's main stock index traded 0.92 percent, or 53.95 points, down at 5,841.70 at 0704 GMT.
Central bank data showed that as of last Wednesday, total foreign holdings in government securities had risen 1 percent from the previous week to 503.4 billion rupees ($3.80 billion).
Comments
Comments are closed for this article.