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Sri Lankan rupee slightly weaker on importer dollar demand; stx up
March 21, 2017 / 6:14 AM / 9 months ago

Sri Lankan rupee slightly weaker on importer dollar demand; stx up

COLOMBO, March 21 (Reuters) - The Sri Lankan rupee traded slightly lower on Monday due to dollar demand from importers, amid rising imports and selling of rupee bonds by foreign investors, dealers said.

The downward pressure on the rupee could ease if the central bank raises its key policy rates on Friday, they said.

Rupee forwards were active, with two-week forwards trading at 152.50/60 per dollar at 0528 GMT, compared with Monday’s close of 152.40/60.

“There is demand from local banks. It’s importer demand and not much of exporter conversions today,” said a currency dealer, asking not to be named.

The spot currency was quoted at 151.50/152.00 per dollar, but was not traded.

The country’s central bank on Monday raised the spot rupee reference rate by 25 cents to 151.60, dealers said. It has been preventing spot rupee trades below 151.35 per dollar since March 8, dealers said.

Central bank officials were not available for comment.

Foreign investors net sold government securities worth 1.41 billion rupees ($9.28 million) in the week ended March 15, after two weeks of net inflows.

They have net sold 63.3 billion rupees of such instruments so far this year.

The rupee has fallen 1.27 percent so far this year, and dealers say they expect the currency to weaken 6-8 percent in 2017. It lost 3.9 percent against the dollar last year.

Sri Lankan shares were up 0.03 percent at 6,042.79, as of 0531 GMT. Turnover stood at 161.9 million rupees ($1.07 million). ($1 = 151.5000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

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