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Sri Lankan rupee falls on importer dollar demand; stocks up
July 7, 2017 / 6:23 AM / 5 months ago

Sri Lankan rupee falls on importer dollar demand; stocks up

COLOMBO, July 7 (Reuters) - The Sri Lankan rupee fell slightly on Friday as demand for dollars from importers surpassed selling of the U.S. currency by exporters and banks, while expectations that imports would increase weighed on the local currency.

The spot rupee was at 153.65/75 per dollar at 0608 GMT, compared with Thursday’s close of 153.63/68.

“The downward pressure is there. We can see some foreign banks buying dollars to settle import bills,” said a currency dealer, requesting anonymity.

“The state banks were not seen in the market but we expect them also to come in as the importer demand is there.”

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 0.14 percent at 6,723.6, as of 0617 GMT. Turnover stood at 657.1 million rupees ($4.28 million). ($1 = 153.5000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

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