Sri Lankan Rupee Weaker on Importer Demand

The Sri Lankan rupee traded weaker on Friday as importer dollar demand surpassed inward remittances of the U.S. currency amid a lack of exporter conversions, dealers said.

The spot rupee was at 145.10/15 per dollar at 0721GMT, compared with Thursday’s close of 145.00/15. One-weekforwards were at 145.25/35, compared with the previousday’s close of 145.15/30.

The spot rupee is usually managed by the central bank, andmarket participants use the forward market levels for guidanceon the currency.

“The importer demand improved after the rupee strengthened,”a currency dealer said, asking not to be named.

The rupee strengthened 0.28 percent on Thursday on inward remittances ahead of Eid al-Adha. The Muslims in Sri Lanka will celebrate Eid al-Adha on Monday. Dealers said seasonal importer demand would pick up from mid-October.

Central bank Governor Indrajith Coomaraswamy said last weekthat the currency was not under upward pressure as capitalinflows had not been of sufficient magnitude to exert suchpressure.

The central bank has largely not intervened to defend the rupee ever since a dual-tenure sovereign bond issue raised $1.5 billion in July. Sri Lankan shares edged down, with the benchmark Colombo stock index down 0.15 percent at 6,493.09 as of 0725 GMT.Turnover was at 199.2 million rupees ($1.37 million).

Courtesy : LBO