March 20, 2018 / 11:54 AM / 3 months ago

Sri Lankan rupee firms on remittances, dollar selling

COLOMBO, March 20 (Reuters) - The Sri Lankan rupee ended slightly higher on Monday as exporters sold dollars and as foreign remittances boosted inflows, easing some pressure on the currency that hit a record low in the previous session.

The rupee closed at 156.08/20 per dollar, recovering slightly from Monday’s 156.10/15 close.

It hit an all-time low of 156.20 per dollar in the previous session, matching Friday’s record intraday low.

“Today, there was less import demand and we have seen some remittances and exporter conversions,” said a currency dealer.

The rupee has weakened 1.73 percent so far this year after declining 2.5 percent last year and 3.9 percent in 2016.

The currency is expected to remain under pressure on continued importer demand for dollars ahead of the traditional New Year in April, dealers said.

A gradual depreciation in the rupee and higher volatility this year are expected on account of debt repayments by the government, they added.

The International Monetary Fund said on March 9 that Sri Lanka’s economy remains vulnerable to adverse shocks due to its large public debt and low external buffers.

The government must repay an estimated 1.97 trillion rupees ($12.68 billion) in 2018 - a record high - including $2.9 billion of foreign loans and a total of $5.36 billion in interest.

Foreign investors sold government securities worth a net 3.1 billion rupees in the week ended March 14, central bank data showed. ($1 = 155.9500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez)

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