Rupee gains on remittances, exporter dollar sales

REUTERS: The Sri Lankan rupee closed higher yesterday as late exporter dollar conversions and remittances surpassed demand from importers for the greenback, dealers said.

The spot rupee, which traded at 153.80 per dollar earlier in the session, closed at 153.45/55, firmer from Thursday’s close of 153.55/65.

“Month-end remittances and exporter dollar conversions helped the rupee to recover from the fall,” said a currency dealer, requesting anonymity. “There was dollar demand from oil importers earlier in the day.” The rupee has risen 0.1 percent for the week, Thomson Reuters data showed.

Dealers said they expect the rupee to weaken by around 4-4.5 percent during the year.

The rupee has slipped 2.6 percent so far in the year.

The currency came under pressure early this month due to dollar demand from state-run Ceylon Petroleum Corp (CPC), which stocked up crude oil ahead of an expected fuel price hike, dealers said.

The currency was expected to weaken on generally higher import demand ahead of the national budget next month, dealers said.

The island nation has seen Rs.19.67 billion of net inflows into equities this year as of Friday’s close, and Rs.38.2 billion into government securities as of October 18, official data showed.