February 14, 2018 / 7:27 AM / a year ago

Sri Lanka rupee hits record low on heavy dollar demand - dealers

COLOMBO, Feb 14 (Reuters) - Sri Lanka’s rupee hit a record low of 155.90 per dollar on Wednesday, on heavy demand for dollars from importers.

Dealers said there was a lack of exporter dollar sales amid political uncertainty after the ruling coalition government suffered a defeat in local elections over the weekend.

Two dealers said they traded the currency at 155.90. The currency surpassed the previous all-time low of 155.00 hit on Monday.

“Importers are buying with panic and exporters are reluctant to sell due to the political uncertainty,” a currency dealer told Reuters, asking not to be named as he is not authorised to speak to the media.

“Unless otherwise you see a clear direction, this trend will continue.”

President Maithripala Sirisena’s centre-left Sri Lanka Freedom Party (SLFP) and Prime Minister Ranil Wickremesinghe’s centre-right United National Party (UNP) suffered a defeat in a local election at the weekend, raising concerns over the future of the unity government.

The surprise win by a political party backed by former president Mahinda Rajapaksa, who lost the presidential poll in 2015, could also undermine the island nation’s reform agenda, analysts said. Rajapaksa has urged the government to hold fresh parliamentary elections. (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Jacqueline Wong)

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