The Sri Lankan rupee ended weaker on Wednesday due to dollar demand from importers and downward pressure on the local currency was expected to continue on foreign selling in government securities, dealers said. The spot currency ended at 130.75/95 per dollar, compared with Tuesday's close of 130.65/70. "There is pressure to depreciate. Imports have also picked up," said a currency dealer asking not to be named.
"The dollar demand is picking up. Exporters have stopped buying forwards and they are just managing with minimum requirement. We expect a further fall in the rupee because lower interest rates have resulted in a rise in imports and foreign selling of government securities." In a surprise development, yield in 364-day t-bills rose 11 basis points to 6.00 percent, its first rise since December 20, 2013. Currency dealers said this was a confusing signal in a falling interest rate regime.
Three-day forward or spot next closed at 130.90/131.00 per dollar with compared with Tuesday's close of 130.70/75. The central bank in the last week of September limited the spot range to between 130.40 and 130.50, to prevent any sharp falls amid heavy selling in stocks and a pullback by foreign investors from government securities. Some currency dealers said the rupee would stay steady despite the downward pressure at least until year-end on central bank intervention and as foreign currency reserves stand at more than $9 billion.
Comments
Comments are closed.