REUTERS - The Sri Lankan rupee was slightly down yesterday, hovering near a record low in dull trade as importer dollar demand surpassed inward remittances, dealers said.
The rupee was at 143.25/35 per dollar at 0601 GMT compared with Thursday’s close of 143.22/27, not far from an all-time low of 143.30 hit on Nov. 27.
“Activity is getting low day by day as we are getting in to the holiday season,” said a currency dealer, asking not to be named.
“The rupee will stay steady in the short term. The Central Bank is also comfortable at these level and we see state banks coming in when it touches 143.20 and also they are not allowing the rupee to go beyond 143.25,” the dealer said.
Dealers said inward remittances for the festival season would ease the pressure on the local currency in the short term.Prime Minister Ranil Wickremesinghe on Wednesday warned of pressure on the currency due to a China-led global slowdown and a possible Federal Reserve rate hike ahead of elections in the United States.
“We have got to remember that there will be pressure on our currencies and there’ll be an increase in financial market volatility as far as we are concerned,” he said.
Sri Lanka is to seek an IMF stand-by arrangement to fend off a risk that its economy will be hurt next year by repercussions from events affecting major economies.
IMF on Thursday said they do have concerns with the proposed 2016 budget, which does not envisage significant consolidation relative to the expected out-turn for 2015 and Sri Lanka has not made a formal request for International Monetary Fund help but the fund’s staff are looking at ways to help the island nation. Sri Lanka’s main stock index was 0.3 percent weaker at 6,860.34 at 0637 GMT. Turnover was Rs. 97.6 million ($681,564.25).