Rupee plunges to record low on importer dollar demand

(Colombo) REUTERS: The Sri Lankan rupee touched a fresh low yesterday on dollar demand from importers, just days after it slipped to a record low, but a late bout of selling of the U.S. currency by exporters helped cut losses, dealers said.

The spot rupee hit an all-time low of 160.00 per dollar, breaching its previous record low of 159.80 hit on Monday.

The rupee, however, ended the day at 159.70/90 per dollar, lower than Wednesday’s close of 159.50/70. The currency has declined 4 percent this year.

“The dollar demand was there in the morning and after the dollar hit 160. We saw some small time exporters coming into market,” a currency dealer said.

The rupee is under pressure mainly due to the global trend, and it was not specific to the country’s currency, dealers said, adding they expect the rupee to trade in the 163-165 range by the end of the year.

Foreign investors sold government securities worth a net Rs.2.8 billion (US$17.60 million) in the week ended June 6, bringing the outflow so far this year to Rs.19.9 billion, Central Bank data showed.

Sri Lanka’s currency and bond markets will be closed for a public holiday today.