17 May 2017 10:24 am
REUTERS: The Sri Lankan rupee weakened slightly yesterday as mild importer dollar demand surpassed selling of the U.S. currency by exporters, dealers said.
Rupee forwards were active, with the spot-next or three-day forwards trading at 152.65/75 per dollar at 0635 GMT, compared with Monday’s close of 152.60/70.
The spot rupee did not trade yesterday.
The Central Bank fixed the spot rupee reference rate at 152.10 on May 5.
Central Bank Governor Indrajit Coomaraswamy said last week that the monetary authority did not want to allow the rupee to fall “too quickly”, but suggested further weakness in the exchange rate is on the cards as policymakers sought a competitive currency.
The downward adjustment to the spot currency was to make the rupee more competitive, he added.
The Central Bank has allowed the currency to gradually depreciate since mid-December, revising its spot reference rate multiple times.
“We have seen some exporter (dollar) conversions and there is some importer (dollar) demand. But the dollar demand is on the low side,” said a currency dealer.
Positive news about trade concessions helped cap losses in rupee forwards,
dealers said.
The European Union said yesterday the country’s GSP Plus trade concessions could be started towards end of this week after the Council of Ministers of the European Union approved the concession last week.
Finance Minister Ravi Karunanayake said on Sunday revenue rose 17 percent in the first quarter compared with a year ago, surpassing the government’s expectations, due to higher tax collection.
Sri Lanka drew a blowout response in its return to the international bond market, attracting orders of more than US $ 11 billion from 500 accounts for a US $ 1.5 billion 10-year bond.
Currency dealers expect higher dollar liquidity from the inflows to help stabilise
the rupee.