Reply To:
Name - Reply Comment
Last Updated : 2024-04-26 02:12:00
REUTERS - The Sri Lankan rupee was trading weaker yesterday due to dollar demand from importers who fear the economic policies of U.S. President-elect Donald Trump could lead to a rise in the greenback and interest rates.
Dealers said foreign investors might pull out of emerging markets, including Sri Lanka, if the U.S. Federal Reserve raises interest rates next month. The dollar index, which tracks the greenback against a basket of six major global peers, was steady at 101.68 yesterday, down from its Thursday peak of 102.05, the highest level since March 2003.
Sri Lanka rupee forwards were active yesterday, with spot-next forwards trading at 148.80/90 per dollar at 0601 GMT, compared with Thursday’s close of 148.65/75.
The spot rupee was hardly traded, but was quoted at 147.90/148.20.
The Central Bank revised the spot rupee reference rate to 147.95 per dollar on Nov 18, from 147.75 earlier. “The demand is there and not much of exporter selling,” said a currency dealer, asking not to be named.
Finance Minister Ravi Karunanayake said on Thursday that ‘turbulent times’ were the reason for the rupee volatility, adding it was driven by sentiment. “You will have this rocky thing owing to turbulent times that are created artificially by many theories that are put forward, but at the end of the day you will see the real (value) of the rupee coming out with the strong fiscal policies that we will be adopting,” Karunanayake told
reporters in Colombo.
The rupee has been under pressure as exporters have been reluctant to sell dollars due to uncertainties in the local market following the national budget, which has proposed a revision in corporate and withholding taxes.
The currency has also faced pressure due to net selling of government securities by foreign investors after new taxes were proposed in the budget, dealers said.
Foreign investors net sold government securities worth Rs.37.12 billion ($250.81 million) in the five weeks ended Nov. 16, data from the Central Bank showed.
The trend of rupee depreciation was however expected to ease as investors wait for Central Bank action after the IMF released the second tranche of a loan, worth $162.6 million, under its $1.5-billion loan programme, dealers said.
Sri Lankan shares were marginally firmer, with the benchmark Colombo stock index up 0.07 percent at 6,257.36 as of 0614 GMT. Turnover stood at Rs.51.2 million ($346,179.85).
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
US authorities are currently reviewing the manifest of every cargo aboard MV
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