COLOMBO: The Sri Lankan rupee edged lower on Thursday as importer dollar demand surpassed mild greenback sales by exporters, dealers said, a day ahead of 2016 budget presentation.
Dealers said nobody was trading below 142.35, a level which is seen as the central bank's desired level, despite importer dollar demand.
The rupee closed at 142.35/55 per dollar, edging down from Wednesday's close of 142.25/30.
Dealers also said investors were waiting for cues from the new government's first full-year budget on Friday.
Sri Lankan Finance Minister Ravi Karunanayake will seek to boost tax revenues and rationalise spending in the new government's first full-year budget on Friday, but analysts see him showing little commitment to fiscal consolidation.
"Exporter selling is very less. They are very reluctant to sell. The rupee is trading a tad weaker with less (dollar) liquidity," said a currency dealer asking not to be named.
Dealers said the central bank was still intervening in the market to prevent the fall in the rupee. Officials at the Central Bank of Sri Lanka were not available for comment.
The central bank sold dollars worth a net $277.95 million in October and $523.80 million in September, latest data showed. Dealers said part of that money was spent to defend the rupee.
The rupee has fallen 7.87 percent so far this year and 5.34 percent since the central bank allowed free-float on Sept. 4.
Commercial banks parked 138.44 billion rupees ($973.56 million) of surplus liquidity on Thursday, using the central bank's deposit facility at 6 percent, official data showed.
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