Rupee edges up on exporter dollar sales

REUTERS: The Sri Lankan rupee closed marginally firmer yesterday, as dollar conversions by exporters outpaced importer demand for the U.S. currency, dealers said.

The spot rupee closed at 153.65/75 per dollar, compared with Wednesday’s close of 153.70/75.
“Exporters are selling dollars to book forwards because premiums are high. There were petroleum and general imports. We see continuous exporter selling,” a currency dealer said, asking not to be named.

Though the rupee is under pressure, it may not fall as much as the market previously expected, dealers added.

The market had expected a 4 percent fall in the currency for 2017. The currency has lost 2.7 percent so far in the year.

The market expects the currency to face pressure, with imports of more low-end vehicles on which the government has already reduced taxes.

The government imposed new taxes on high-end motor vehicles, telecoms, banks and liquor in a bid to boost revenues in its 2018 budget outlined on Nov. 9, as the budget deficit for the current year slipped to 5.2 percent of the GDP.

Foreign investors were net buyers of equities worth Rs.18.5 billion (US$120.4 million) this year as of yesterday’s close. They were net buyers of government securities worth Rs.45.7 billion as of Nov. 15, official data showed.