Sri Lankan Rupee Further Derogated

Sri Lankan rupee down; central bank revises spot ref rate to record low

( January 25, 2017, Colombo, Sri Lanka Guardian) The Sri Lankan rupee traded weaker on Wednesday as dollar demand from importers outpaced sluggish greenback sales by exporters, while the central bank revised the spot rupee reference rate by 10 cents to a record low of 150.25 per dollar, the Reuters news agency reported while quoting the dealers.

Dealers said the downward pressure on the rupee is expected to continue until some steady foreign inflows come in.

Rupee forwards were active, with two-week forwards were trading at 151.05/15 per dollar at 0523 GMT, compared with Tuesday’s close of 150.95/151.05.

The dollar, however, drifted lower against a basket of major currencies, giving back a bulk of its overnight gains.

The spot rupee was quoted around the central bank’s reference level of 150.25, dealers said.

“The central bank’s spot reference rate revision indicates that the demand pressure is building up,” a currency dealer said, asking not to be named.

“Generally we see exporters booking forwards in January. But this time we haven’t seen them booking, with the drought and other uncertainties, which could impact their production.”

Officials from the central bank were not available for comment.

The rupee has been under pressure due to rising imports, net selling of government securities by foreign investors, while the central bank said defending the currency was not sensible.

The central bank sold $458 million worth of development bonds on Thursday and investors said they expected the move would ease the pressure on the rupee.

Foreign investors have net sold 19.8 billion rupees ($132.00 million) worth government securities in the two weeks ended Jan. 18, according to the latest central bank data.

Sri Lankan shares were largely flat at 6,134.63 as of 0530 GMT. Turnover stood at 47.5 million rupees ($316,561).

($1 = 150.0500 Sri Lankan rupees)

( Reuters: Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)