Rupee ends lower on importer dollar demand

REUTERS: The Sri Lankan rupee ended weaker yesterday as dollar demand by importers and banks outpaced selling of the greenback by exporters, dealers said.

The rupee closed at 155.05/15 per dollar, compared with Tuesday’s close of 154.85/95. It hit a record low of 155.90 on February 14.

“There were sizable conversions but the demand was high today. The oil related demand was there and some profit repatriations were also there,” said a dealer.

The local currency has weakened one percent so far this year, after declining 2.5 percent last year and 3.9 percent in 2016.

It is expected to be pressured by continued importer demand for dollars, dealers said.

A gradual depreciation in the rupee and higher volatility this year are expected on account of debt repayments by the government, dealers added.

The government must repay an estimated Rs.1.97 trillion in 2018 - a record high - including US $ 2.9 billion of foreign loans and a total of US $ 5.36 billion in interest.

Foreign investors sold government securities worth a net Rs.3.7 billion in the week ended February 21, the Central Bank data showed.