Thursday, 12 November 2015 17:40
COLOMBO: The Sri Lankan rupee edged down on Thursday, hovering near its record low hit earlier in the week, due to importer dollar demand.
The currency ended at 141.99/142.05 per dollar, near its all-time low of 142.00 and weaker from Wednesday’s close of 141.92/97.
Dealers expect the currency to trade around current levels until they see some clarity from the 2016 budget.
The rupee fell 0.35 percent in intraday trading on Monday to a record low of 142.00 per dollar.
“Importer demand surpassed exporter (dollar) sales,” said a currency dealer asking not to be named.
“The exchange rate will be under pressure until the interest rates are raised.”
Another dealer said importers are booking forwards as they are not sure of the budget while exporters are quietly selling in low volumes.
Investors are waiting for more clarity on economic policies from the 2016 budget announcement, scheduled on Nov. 20.
Finance Minister Ravi Karunanayake said market speculation on further rupee weakening would be addressed once the clarity is given through the budget.
“I don’t think it (rupee) is under pressure. It is just speculation,” Karunanayake told a Foreign Correspondents Association forum late on Wednesday. The finance minister also said the upcoming budget will be “capital oriented” and will aim for revenue that is higher than recurrent expenditure.
Commercial banks parked 106.65 billion rupees ($ 751.32 million) of surplus liquidity on Thursday, using the central bank’s deposit facility at 6 percent.
