Rupee falls slightly on importer dollar demand

REUTERS:  The Sri Lankan rupee ended slightly weaker yesterday as dollar demand from importers and banks outweighed mild selling of the U.S. currency by exporters, dealers said.

The rupee closed at 156.10/15 per dollar, compared with Wednesday’s close of 156.05/15.

It touched an all-time low of 156.20 per dollar on Monday, which was hit on Friday.

“Demand was there from foreign banks, as well as from a state bank. The (dollar) conversions were very thin,” said a currency dealer.

The rupee has weakened 1.76 percent so far this year after declining 2.5 percent last year and 3.9 percent in 2016.

The currency is expected to remain under pressure on continued importer demand for dollars ahead of the traditional New Year in April, dealers said.

A gradual depreciation in the rupee and higher volatility this year are expected on account of debt repayments by the government, they added.

The International Monetary Fund said on March 9 that Sri Lanka’s economy remains vulnerable to adverse shocks due to its large public debt and low 
external buffers.

The government must repay an estimated Rs.1.97 trillion (US$12.68 billion) 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 worth a net Rs.3.1 billion in the week ended March 14, Central Bank data showed.