February 7, 2018 / 12:01 PM / 3 months ago

Sri Lankan rupee firms in dull trade

COLOMBO, Feb 7 (Reuters) - The Sri Lankan rupee slightly firmed on Wednesday from a record low close as some exporters sold dollars, dealers said.

The rupee weakened to an all-time lowest close of 154.60/70 per dollar on Tuesday, marking its third successive record low close, hurt by dollar demand from banks and importers.

The spot rupee ended at 154.55/65 on Wednesday.

“It was a dull day. There was not much activity besides some exporter conversions,” said a currency dealer.

“But we expect the pressure (on the rupee) to continue with continued importer dollar demand.”

Dealers expect a 2-3 percent depreciation in the rupee and higher volatility this year on account of debt repayment by the government.

President Maithripala Sirisena’s administration must repay an estimated 1.97 trillion rupees ($12.85 billion) in 2018 - a record high - including $2.9 billion of foreign loans and a total of $5.36 billion in interest.

Foreign investors bought 5.9 billion rupees worth of government securities this year up to Jan. 30, central bank data showed.

The rupee fell 2.5 percent last year and 3.9 percent in 2016. (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

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