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Sri Lankan rupee edges up on late exporter dollar sales
November 29, 2016 / 12:01 PM / a year ago

Sri Lankan rupee edges up on late exporter dollar sales

COLOMBO, Nov 29 (Reuters) - The Sri Lankan rupee ended slightly higher on Tuesday, as late exporter dollar sales surpassed importer demand for greenbacks amid fears that economic policies of U.S. President-elect Donald Trump could lead to a rise in the dollar 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 would have an impact on foreign outflows.

Foreign investors have net sold 38.93 billion rupees ($262.69 million) worth of 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 ended at 149.15/25 per dollar, compared with Monday’s close of 149.20/40.

“Rupee ended slightly firmer on late exporter conversions but the (depreciation) pressure is there,” said a currency dealer, asking not to be named.

Dealers expect the rupee to be under pressure till the end of the month before seasonal inward remittances begin.

The spot rupee was hardly traded, but was quoted at 148.40/149.40.

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. (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

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