June 6, 2018 / 11:48 AM / 2 months ago

Sri Lankan rupee hits fresh low on importer dollar demand

COLOMBO, June 6 (Reuters) - The Sri Lankan rupee touched the lowest level since last week on Wednesday, as importer dollar demand surpassed mild selling of the greenback by exporters, dealers said.

The spot rupee ended at 158.75/90, weaker from Tuesday’s close of 158.60/75. It hit an intraday low of 158.80, a level it first reached on Friday, surpassing a previous low of 158.50 hit on May 16.

The currency has declined 3.4 percent so far this year.

“The importer (dollar) demand was there. Some foreign banks were on the buying side and the rupee ended weaker in the absence of state banks,” a currency dealer said.

Dealers said the rupee will be under pressure, with exporters staying on the sidelines in anticipation of a fall in the unit, in line with other emerging market currencies.

The pressure on the currency is unwarranted as gross external reserves are at $9.1 billion and the real effective exchange rate indexes indicate that the currency is competitive, the central bank has said.

Foreign investors sold government securities worth a net 787.24 million rupees ($4.97 million) in the week ended May 30, bringing the outflow so far this year to 17 billion rupees, central bank data showed. ($1 = 158.5500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

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