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Sri Lankan rupee slips on importer dollar demand; stocks up
July 10, 2017 / 6:46 AM / 2 months ago

Sri Lankan rupee slips on importer dollar demand; stocks up

COLOMBO, July 10 (Reuters) - The Sri Lankan rupee edged down on Monday due to importer dollar demand amid mild selling of the U.S. currency by banks and exporters, dealers said.

The spot rupee was at 153.70/75 per dollar at 0616 GMT, compared with Friday’s close of 153.60/70.

Dollar conversions by banks and exporters are not enough to meet the demand from importers, said a currency dealer, requesting anonymity.

“The market has priced in further depreciation of the rupee because of the central bank’s no-intervention policy. We also see some inflows time to time, which prevents a sharp depreciation of the currency,” said the dealer.

The spot rupee resumed trading on June 19 for the first time since May 5, when the central bank fixed its reference rate at 152.50.

Dealers said they expected seasonal demand for dollars to pick up from August.

The rupee has been under pressure since early this year after the central bank stopped defending the currency at a time when the island nation faces a balance of payments crisis.

The central bank is also compelled to buy dollars from the market to meet the reserve target set by the International Monetary Fund (IMF) under a $1.5 billion, three-year loan programme.

Sri Lankan shares were up 0.22 percent at 6,752.04, as of 0624 GMT. Turnover was 220 million rupees ($1.43 million).

$1 = 153.5000 Sri Lankan rupees Reporting by Shihar Aneez; Editing by Subhranshu Sahu

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