September 28, 2017 / 11:48 AM / 10 months ago

Sri Lankan rupee edges down as banks buy dollars to cover import payments

COLOMBO, Sept 28 (Reuters) - The Sri Lankan rupee weakened on Thursday, as demand for dollars from importers to pay for their purchases outweighed conversions of the greenback into local currency by exporters, dealers said.

The spot rupee, which traded at 153.19 per dollar earlier in the day, recovered to close at 153.10/20, but weaker from Wednesday’s closing level of 153.00/10.

“The importer demand was there throughout the day. Both state and foreign banks bought dollars to cover some import bills,” said a currency dealer who did not wish to be named.

The rupee has been under pressure since January after the central bank stopped defending the currency and started buying dollars to build up the country’s depleted foreign currency reserves.

The island nation has seen 17.8 billion rupees ($116.30 million) of net inflows into equities this year as of Thursday’s close, and 17.3 billion rupees worth inflows into government securities as of Sept. 20 this year, official data showed. ($1 = 153.0500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

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