Rupee falls on importer dollar demand

REUTERS: The Sri Lankan rupee edged down yesterday on importer dollar demand, while political uncertainty continued to weigh on investor sentiment, dealers said. The rupee ended at 155.40/50 per dollar, compared with Friday’s close of 155.10/20. The rupee hit a record low of 155.90 on Wednesday.

“Exporters were reluctant to sell (dollar) due to political uncertainty,” a dealer said, asking not to be named.

The local currency has weakened 1.3 percent so far this year. The domestic currency lost 2.5 percent last year and 3.9 percent in 2016. The currency is expected to be pressured by continued demand for dollars from importers, dealers said.

Dealers also said they expect a gradual depreciation in the rupee and higher volatility this year on account of debt repayments by 
the government.

Sirisena’s administration must repay an estimated Rs.1.97 trillion in 2018 - a record high - including US $ 2.9 billion of foreign loans and a total of US $ 5.36 billion in interest.

Foreign investors sold government securities net worth Rs.2.1 billion in the week ended February 14, the Central Bank data showed.