20 January 2018 12:01 am
REUTERS: The Sri Lankan rupee closed slightly weaker yesterday as dollar demand from importers and banks surpassed mild selling of the U.S. currency by exporters, dealers said.
The spot rupee ended at 153.90/154.00 per dollar, compared with Thursday’s close of 153.85/95.
“The demand (for dollars) was there from importers and some banks to settle foreigners who are selling bonds,” said a currency dealer. The rupee might witness volatility with the government’s heavy debt repayment this year, said dealers.
Sri Lanka aims to raise US$500 million this month via development bonds, the Central Bank said last week, as the government faces unprecedented debt repayment this year.
President Maithripala Sirisenea’s administration must repay an estimated Rs.1.97 trillion (US$12.85 billion) in 2018 - a record high including US$2.9 billion of foreign loans, and a total of US$5.36 billion of interest.
Foreign investors had sold Rs.3.2 billion worth of government securities this year up to Jan. 10, Central Bank data showed.
The currency fell 2.5 percent last year and 3.9 percent in 2016.
The Central Bank, while announcing its key economic policies for the year on Jan. 3, said it has allowed more flexibility in determining the exchange rate based on the present market conditions.
It added intervention policies will be adopted consistent with a flexible exchange rate regime and supportive of improving foreign exchange market functionality, and maintaining a competitive exchange rate will be an important objective.