Sri Lankan rupee forwards ended weaker on Tuesday on importer dollar demand and growing policy uncertainty after the government said it would impose fresh taxes in a move that would enable the country to qualify for an IMF loan. Sri Lanka will raise value added tax (VAT) and reintroduce capital gains tax to break out of a debt trap, Prime Minister Ranil Wickremesinghe said on Tuesday, ahead of talks on a $1.5-billion loan it is seeking from the IMF.
One-week rupee forwards, which act as a proxy for the spot currency, ended at 145.15/20 per dollar, weaker from Friday's close of 145.05/15. The markets were closed on Monday. The spot currency did not trade below 143.90, seen as the central bank's desired level.
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