Reuters logo
Sri Lankan rupee falls to near 7-mth low; depreciation pressure persists
June 24, 2013 / 12:16 PM / 4 years ago

Sri Lankan rupee falls to near 7-mth low; depreciation pressure persists

COLOMBO, June 24 (Reuters) - Sri Lanka's rupee hit a
near seven-month low on Monday, before a state-controlled bank
intervened to stabilise the currency, dealers said, amid
continuous depreciation pressure due to dollar demand from
importers and foreign investors who are exiting in the wake of
rising U.S. treasury yields. 
    The lowest trade was at 129.00 per dollar, dealers said,
before the currency closed at 128.90/129.00, edging down
slightly from Friday's close of 128.90/95. 
    Two dealers said one of the two state-run banks, through
which the central bank usually directs the market, sold dollars
to ease depreciation pressure. 
     Dealers said some foreign investors also booked forwards to
hedge their exposure, tracking foreign outflows in other Asian
    "The rupee is going to remain under pressure until the U.S.
treasuries settle. Until such time we are going to see a highly
volatile rupee," a currency dealer said on condition of
    The rupee fell 0.33 percent last week, after losing 1.6
percent in the week previous to that, which currency dealers
attributed to foreign investors selling debt as part of a
broader selloff in emerging markets. 
    Foreign investors have been shifting to treasury bills while
selling longer tenure T-bonds, the latest central bank data
showed on Friday, as a rise in U.S. treasury yields has prompted
many offshore investors to rush to the exits. 
    The local currency has weakened 1.1 percent so far this
year, following a 10.7 percent depreciation in 2012 as the
central bank opted for a flexible exchange rate regime in
February 2012.
    The central bank on Monday shrugged off the likelihood of
fresh pressure on the rupee, despite the widening of the trade
deficit in April. 
    Sri Lanka's main stock index edged down to a
seven-week low with turnover slumping to a six-month low with
some retail investors taking profits. 
    The bourse ended 0.1 percent, or 5.89 points, weaker at
6,149.38, its lowest since May 6 on concerns of a possible
pullout by more foreign funds. 
    The market witnessed net foreign inflows of 47 million
rupees ($364,800) on Monday in low foreign activity, extending
net foreign buying in shares to 16.25 billion rupees so far this
    The day's turnover was at 201 million rupees, its lowest
since Dec. 24, a fifth of this year's daily average of 1.02
billion rupees.
($1 = 128.8500 Sri Lanka rupees)

 (Reporting by Ranga Sirilal and Shihar Aneez; Editing by
Prateek Chatterjee)

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below