Rupee weaker; remittances prevent steeper fall

REUTERS:  The Sri Lankan rupee ended weaker yesterday due to mild importer dollar demand, but month-end inward remittances capped the fall, dealers said.

Rupee forwards were active, with one-week forwards ending weaker at 148.35/40 per dollar compared with Friday’s close of 148.25/30.

“The month-end inward remittances were there, but the rupee ended weaker on mild importer (dollar) demand,” a currency dealer said, asking not to be named.

The Central Bank on Friday raised the spot reference rate by 50 cents to 147.40 per dollar from 146.90 as higher importer dollar demand weighed on the currency while moral suasion by the Central Bank prevented a steeper fall.

The spot rupee is usually managed by the Central Bank, and market participants use the forward market levels for guidance on the currency. Officials from the Central Bank were not available for comment.

Dealers said foreign selling in government securities also put pressure on the currency.