August 2, 2018 / 11:59 AM / 2 months ago

Sri Lanka rupee ends weaker on importer dollar demand

COLOMBO, Aug 2 (Reuters) - The Sri Lankan rupee ended marginally weaker on Thursday as late dollar demand from foreign banks surpassed greenback sales, traders said.

The rupee, which traded at 159.80 rupees per dollar during the day, ended weaker at 159.75/85 per dollar compared with Wednesday’s close of 159.55/65. It has fallen 4.04 percent so far this year, and hit a record low of 160.17 on June 20.

“Today, in the latter part of the day, we have seen some demand coming from a foreign bank. There were remittance flows but the demand was there at the latter part of the day,” said a currency dealer, asking not to be named.

Sri Lanka has raised import duties on small hybrid cars by more than 50 percent, the government said on Wednesday, aiming to boost revenue and curb a sharp fall in the rupee.

The finance ministry imposed a minimum duty of 1.25 million Sri Lankan rupees on any hybrid car with an engine capacity of less than 1,000 cubic centimetres to discourage the imports which has pressurised the rupee currency.

Sri Lanka’s central bank governor, Indrajit Coomaraswamy, had said earlier that the rupee’s decline was driven mainly by factors outside Sri Lanka and that emerging-market currencies were under pressure.

Foreign investors sold government securities worth a net 4.6 billion rupees ($28.83 million) in the week ended July 25, bringing the outflow so far this year to 36.2 billion rupees, central bank data showed. ($1 = 159.5500 Sri Lankan rupees) (Reporting by Ranga Sirilal; Editing by Sunil Nair)

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