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Rupee hits record low on importer dollar demand

15 September 2015 02:51 am - 0     - {{hitsCtrl.values.hits}}

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REUTERS: The Sri Lankan rupee touched an all-time low of 140.00 per dollar yesterday due to importer dollar demand, although it later regained some of the losses after a state bank sold dollars to arrest the fall, dealers said.
The spot rupee fell 0.5 percent to 140.00 per dollar earlier in the day, from Friday’s close of 139.30/50. The previous record low of 139.30 was hit on Friday.
However, the state bank sold some dollars at 140.00, which dealers said was received by the market as the direction from the Central Bank to support the currency. The rupee closed at 139.85/95 yesterday.
“Still we see pressure from importer side,” a currency dealer said asking not to be named. 
“We still see a weaker rupee and it is likely to fall further.”
Another currency dealer confirmed that the rupee touched a fresh trough of 140.00 per dollar before the intervention from the state bank.
Officials from the Central Bank were not immediately available for comment.
The market expects the currency to fall further in the short term if the Central Bank fails to tighten interest rates or the country does not see strong inflows soon.
Some dealers said imports of vehicles might slow down ahead of the next year budget scheduled in November, but imports of fast moving goods would continue as usual.
Finance Minister Ravi Karunanayake said last week that the rupee will be brought to an acceptable level before too long and interest rates, which have been on a rising trend, will be pushed down.


 
Shares edge up, financials lead
REUTERS: Sri Lankan shares edged up yesterday after two sessions of falls, led by gains in financials in low trading volume as investors were in a wait-and-see mode amid a weakening rupee and high interest rates, brokers said.
The main stock index ended 0.13 percent, or 8.95 points, firmer at 7,162.44.
Turnover stood at Rs.696.6 million, well below this year’s daily average of Rs.1.13 billion.
“Investors are worried about the policy and strategies of the government,” said

Investors are waiting for the budget and how the new government is going to bridge the budget deficit, Samarasinghe added.
“Investors are also expecting further depreciation in the rupee, which could be a reason for them to holding back.”
The rupee touched an all-time low of 140.00 per dollar yesterday due to importer dollar demand, although it later regained some of the losses after a state bank sold dollars to arrest the fall, dealers said.
The weaker rupee curbed investor risk appetite and rising market interest rates also hit sentiment with T-bill yields at more than five-month high.
Foreign investors were net buyers of Rs.289.9 million worth shares yesterday, but they have been net sellers of Rs.3 billion worth of equities so far this year.
The country’s biggest listed lender, Commercial Bank of Ceylon PLC, rose 1.14 percent and Lanka ORIX Leasing Company PLC gained 0.19 percent. Conglomerate John Keells Holdings PLC fell 0.57 percent. 
 
 
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