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Sri Lankan rupee falls on importer dollar demand; stocks weaker
July 5, 2017 / 5:25 AM / in 5 months

Sri Lankan rupee falls on importer dollar demand; stocks weaker

COLOMBO, July 5 (Reuters) - The Sri Lankan rupee fell on Wednesday as importer dollar demand outpaced selling of the greenback by exporters and banks, while expectations imports would increase also weighed on the local currency, dealers said.

The spot rupee was trading at 153.65/75 per dollar at 0515 GMT, slightly weaker from Tuesday’s close of 153.63/70.

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

“The pressure is there to weaken with the import demand,” said a currency dealer, requesting anonymity.

“There is construction-related import demand.”

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 down 0.14 percent at 6,724.45 as of 0519 GMT. Turnover stood at 259 million rupees ($1.69 million).

$1 = 153.6500 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath

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