Rupee edges down on importer dollar demand

REUTERS - The Sri Lankan rupee fell to near its record low yesterday due to importer dollar demand, with currency dealers expecting the currency to weaken further in 2016 due to lower reserves and higher imports.
The rupee was at 143.70/90 per dollar at 0651 GMT, 0.07 percent down from Thursday’s close of 143.60/80. It hit a record low of 143.80 on Tuesday.
“There is some importer dollar demand and we see the same declining trend continuing next year as well,” a currency dealer said, asking not to be named.
“Given Sri Lanka’s high dependency on imports and lower foreign currency reserves that would limit central bank’s intervention to defend the currency, the rupee will continue to weaken.”
Finance Minister Ravi Karunanayake on Thursday told parliament that Sri Lanka’s reserves were at “a healthy” $6.1 billion. However, that figure is 26 percent lower than the reserves at the end of 2014.
The rupee has fallen 8.7 percent so far this year. It has declined 6.3 percent since the Central Bank floated the local currency on Sept. 4.
Sri Lanka’s main stock index was up 0.2 percent, or 13.38 points, at 6,873.37 by 0700 GMT, heading for a fourth straight session of gains. Turnover stood at Rs.502.6 million ($3.50 million).