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Sri Lankan rupee ends down on importer dlr demand
October 6, 2016 / 12:31 PM / a year ago

Sri Lankan rupee ends down on importer dlr demand

COLOMBO, Oct 6 (Reuters) - The Sri Lankan rupee ended lower on Thursday due to importer dollar demand in the absence of central bank intervention, while seasonal demand from importers is expected to weigh on the local currency until the year-end, dealers said.

The spot rupee ended at 146.88/95 per dollar, compared with Wednesday’s close of 146.70/75.

“Foreign buying into government securities has slowed with the fall in interest rates and there are inflows from remittances and stock-related transactions,” said a currency dealer, asking not to be named.

“But we see some of the dollars from the inflows are bought by the central bank. So with the importer dollar demand picking up, the rupee is under downward pressure. This will continue until the Christmas festival,” the dealer added.

Officials at the central bank were not available for comment.

The central bank has been under pressure from the International Monetary Fund (IMF) to continue rebuilding international reserves and maintain exchange rate flexibility to develop the foreign exchange market further.

The central bank usually intervenes in the market when there is volatility.

The rupee has been under pressure due to importer dollar demand, posting a 0.65 percent decline last week.

Finance Minister Ravi Karunanayake said on Monday the government wanted a strong currency through higher foreign inflows and without interventions. (Reporting by Shihar Aneez; Editing by Sunil Nair)

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