February 6, 2018 / 11:44 AM / 2 months ago

Sri Lankan rupee hits fresh low on importer dollar demand

COLOMBO, Feb 6 (Reuters) - The Sri Lankan rupee hit a record low for a third successive session on Tuesday hurt by dollar demand from banks and importers, but remittances and greenback sales by a state bank checked the fall, dealers said.

The spot rupee ended at 154.60/70 per dollar, surpassing the previous low of 154.30/35 hit on Friday.

Sri Lanka’s stock, bond and foreign exchange markets were closed on Monday for a special holiday.

The currency fell 0.4 percent last week, surrendering a 0.2 percent gain made previous week.

“The demand was severe today. There was importer demand and we saw some foreign banks buying dollars, may be for a profit repatriation,” said a currency dealer.

“A state bank sold some dollars in the morning, but that was not enough to prevent the fall.”

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 Vyas Mohan)

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