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Sri Lankan rupee ends weaker on importer dollar demand
November 15, 2017 / 12:40 PM / in 9 days

Sri Lankan rupee ends weaker on importer dollar demand

COLOMBO, Nov 15 (Reuters) - The Sri Lankan rupee fell on Wednesday on importer dollar demand and foreign bond sales, while expectations of higher seasonal imports and a pickup in motor vehicle buying after taxes were slashed in last week’s budget also weighed on the market.

The spot rupee, which touched a low of 153.83 per dollar in intraday trading, closed at 153.75/85 per dollar, compared with Tuesday’s close of 153.63/65.

“There were concerns on some budget policies and some were awaiting clarity,” a currency dealer said requesting anonymity.

“The rupee will further depreciate because we see demand for imports of fuel, steel and also general imports. People could import more lower-end vehicles on which the government reduced taxes. We do not see a proper plan for shorter term dollar inflows.”

The government imposed new taxes on high-end motor vehicles, telecoms, banks and liquor in a bid to boost revenues, in its 2018 budget outlined last week, as the budget deficit for the current year slipped to 5.2 percent of GDP.

Finance Minister Mangala Samaraweera announced on Wednesday tax concessions worth a monthly 1.5 billion rupees.

The rupee has slipped 2.8 percent so far this year.

Foreign investors had invested a net 19.4 billion rupees ($126.18 million) in equities this year as of Wednesday’s close, and 44.3 billion rupees in government securities as of Nov. 8, official data showed.

$1 = 153.7500 Sri Lankan rupees Reporting by Shihar Aneez; Editing by Subhranshu Sahu

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