COLOMBO: The Sri Lankan rupee ended weaker on Monday on dollar demand from importers and foreign banks as foreign investors sold government securities amid concerns of further depreciation in the rupee, dealers said.
Rupee forwards were active, with one-month forwards ending at 152.95/15 per dollar, weaker from Friday's close of 152.70/80.
However, two-week forwards ended marginally stronger at 151.75/75 per dollar due to exporter dollar sales later in the day. It ended at 151.80/152.00 per dollar on Friday.
"There is depreciation pressure (on the rupee) as there is steady importer (dollar) demand and some bond outflows, but we can't see central bank intervention these days unlike last month," said a currency dealer, requesting not to be named.
Central bank officials were not available for comment.
Sri Lanka could face balance-of-payments pressure due to foreign outflows from government securities, a government document showed on Thursday, even as the island-nation is in the process of raising up to $2.5 billion from foreign borrowing.
Foreign investors have net sold 49.1 billion rupees ($325.70 million) worth of government securities in the seven weeks to Feb. 15, according to the latest central bank data.
Finance Minister Ravi Karunanayake said on Feb. 14 that protecting a fragile rupee was more important than controlling interest rates as the local currency tended not to rebound after depreciating.
Central Bank Governor Indrajit Coomaraswamy said early this month that the bank was not planning to abruptly stop supporting the rupee.
The rupee has weakened 0.8 percent so far this year, under pressure from rising imports and net selling of government securities by foreign investors. It fell 3.9 percent last year, following a 10 percent drop in 2015.
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