Reply To:
Name - Reply Comment
Last Updated : 2024-04-18 08:00:00
(Colombo) REUTERS: The Sri Lankan rupee hit an all-time low of 166.10 per dollar yesterday due to dollar demand from importers and banks to facilitate foreign bond outflows, but selling of the U.S. currency by a state bank limited the fall, market sources said.
Exporters expect the rupee to be under pressure due to continued importer dollar demand and less exporter dollar sales.
Meanwhile, the dollar held near seven-week low against its rivals while riskier currencies gained after U.S. President Donald Trump escalated his trade war with China by imposing 10 percent tariffs on about US$200 billion worth of Chinese imports.
The Sri Lankan rupee surpassed its previous record of 165.10 per dollar hit in the previous session, and closed at 165.90/166.00, compared with Monday’s close of 165.00/30.
An illiquid market for dollars, dollar buying by foreign banks to facilitate bond outflows and importer demand weighed on the currency, sources said. Sri Lanka’s Finance Ministry would not intervene in exchange rate management, Junior Finance Minister Eran Wickremaratne said on Thursday, adding that the Central Bank would intervene as and when necessary to curb excess volatility in the exchange rate and also punish speculators.
The Central Bank cut the net open positions of banks on Sept.6 to increase dollar liquidity, forcing commercial banks to sell dollars.
Since last week, currency dealers have been refusing to speak to the media, citing instructions from the central bank. However, Central Bank Governor Indrajit Coomaraswamy has said that he was unaware of any such move.
The rupee has weakened 2.7 percent so far this month after a 1.2 percent drop last month, and has declined 8 percent so far this year.
It will be under pressure due to year-end seasonal dollar demand from importers, dealers have said. The currency has also been hurt by weakness in the Indian rupee. India is Sri Lanka’s biggest trading partner and the Indian rupee, which also hit a record low yesterday, is Asia’s worst performing currency this year. Foreign investors sold government securities worth a net Rs.2.6 billion (US$15.78 million) in the week ended Sept. 12, extending the net outflow so far this year to Rs.55.9 billion worth of securities, Central Bank data showed.
Add comment
Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.
Reply To:
Name - Reply Comment
On March 26, a couple arriving from Thailand was arrested with 88 live animal
According to villagers from Naula-Moragolla out of 105 families 80 can afford
Is the situation in Sri Lanka so grim that locals harbour hope that they coul
A recent post on social media revealed that three purple-faced langurs near t