Sri Lankan rupee slide continues, hits fresh low

COLOMBO: The Sri Lankan rupee fell to a fresh low on Wednesday, tracking weakness in emerging markets stocks and currencies and bruised by rising demand for the greenback from importers.

The rupee reached a level of 162.15 per dollar, its 12th successive all-time low.

Currencies and stocks in emerging markets were pressured after news that South Africa had slipped into recession and concerns about inflation in Turkey and the Philippines.

"Until the dollar rally is over, we will see the same trend of depreciation (in the rupee)," said a dealer who requested anonymity.

"This is predominantly externally-driven. The regional currencies are also on a falling trend with oil prices also on the rise. It makes sense for exporters to hold in dollars until the rupee touches the bottom."

Dealers said inflows were few, while foreign banks bought dollars to ease some equity-related outflows.

Sri Lanka will not intervene in the foreign exchange market and the government will leave the level of the rupee for market forces to decide, junior finance minister Eran Wickremaratne told Reuters on Tuesday.

The currency has so far weakened 0.4 percent this month, following a 1.2 percent decline last month. It has dropped 5.7 percent this year, and closed at 161.95/162.05 per dollar on Monday.