COLOMBO Nov 29 The Sri Lankan rupee traded
marginally weaker on Tuesday, hurt by dollar demand from
importers amid fears that economic policies of U.S.
President-elect Donald Trump may lead to a rise in the greenback
and trigger foreign fund outflows.
The market shrugged off the central bank's key monetary
policy decision on Tuesday to keep rates unchanged. Dealers said
investors are yet to digest the impact of the decision.
At the post-monetary policy media briefing, central bank
Governor Indrajith Coomaraswamy said aggressive monetary policy
tightening by the U.S. Federal Reserve will have an impact on
the foreign outflow.
Foreign investors have net sold 38.93 billion rupees
($262.69 million) worth government securities in the six weeks
ended Nov. 23 ahead of an expected Fed rate hike in December.
The U.S. dollar took a breather on Tuesday as global bonds
steadied from their recent rout, while equities flatlined as
political risk resurfaced in Europe ahead of a referendum in
Italy this weekend.
Sri Lankan rupee forwards were active, while
spot-next forwards were trading at 149.25/35 per dollar at 0806
GMT, compared with Monday's close of 149.20/40.
"The demand is there and the supply is also there. But the
(importer) pressure is more," said a currency dealer, asking not
to be named.
Dealers expect the trend to continue till the end of the
month before the seasonal inward remittances start coming in.
The spot rupee was hardly traded, but was quoted at
The rupee has been under pressure as exporters have been
reluctant to sell dollars due to uncertainties in the local
market following the national budget, which proposed a revision
in corporate and withholding taxes.
The currency has also faced pressure due to net selling of
government securities by foreign investors after new taxes were
proposed in the budget, dealers said.
Sri Lankan shares were steady, with the benchmark Colombo
stock index up 0.01 percent at 6,229.25 as of 0808 GMT.
Turnover stood at 790.7 million rupees ($5.31 million).
($1 = 149.0000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas