April 2, 2018 / 11:49 AM / 6 months ago

Sri Lankan rupee rises on inward remittances, exporter sales of dollar

COLOMBO, April 2 (Reuters) - The Sri Lankan rupee closed higher on Monday as dollar selling by exporters and inward remittances surpassed importer demand for the U.S. currency, dealers said.

The rupee, which traded at 155.60/75 per dollar earlier in the session, gained 0.3 percent and closed at 155.15/20 per dollar, compared with Thursday’s close of 155.50/70.

The rupee gained 0.4 percent last week. The markets were closed for a holiday on Friday.

The currency has recovered and risen 0.7 percent since it hit a record low of 156.20 per dollar on March 16. The rupee has weakened 1.43 percent so far this year after declining 2.5 percent last year and 3.9 percent in 2016.

“There was (dollar) demand in the morning, but some selling by exporters and also inflows due to inward remittances came in, and rupee ended firmer,” said a currency dealer.

Dealers expect pressure on the currency to ease with more inward remittances ahead of the traditional New Year in mid-April.

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

The International Monetary Fund said on March 9 that Sri Lanka’s economy remained 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 - including $2.9 billion of foreign loans and a total of $5.36 billion in interest.

Foreign investors sold government securities worth a net 211.7 million rupees in the week ended March 21, central bank data showed. ($1 = 155.2000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

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