Sri Lanka rupee falls to near 1-year low on foreign bond sales
COLOMBO, Aug 23 (Reuters) - The Sri Lankan rupee fell to a near one-year low against the dollar on Friday due to renewed selling of government bonds by foreign investors and on importer demand for the greenback, dealers said. The market expects the local currency to depreciate further with foreign investors gradually exiting treasury bonds and exporters holding onto dollars. Dealers said banks switched to one-day currency forwards in an inactive spot market. The spot rupee fell to 132.45 per dollar, its lowest since Sept. 14, Thomson Reuters data showed. It had closed at 131.90 on Thursday. The spot next or one-day forward closed at 132.75/85 per dollar, compared with Thursday's close of 132.15/30. "The rupee weakened with foreigners selling bonds and importers booking forwards. Exporters are holding on (to dollars) expecting more depreciation (in the rupee)," a dealer said. The rupee fell around 4 percent between June 7 and July 18, after foreign investors started pulling out of Sri Lanka's treasury bonds due to a rise in U.S. treasury yields. The benchmark 10-year note yield is hovering around a two-year high at 2.9180 percent. (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)
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