Rupee hits record low for second day on importer dollar demand

REUTERS: The Sri Lankan rupee hit a record low for a second day running yesterday due to dollar demand from banks and importers, but remittances and greenback sales by exporters checked the fall, dealers said.

The spot rupee ended at 154.30/35 per dollar, surpassing the previous low of 154.28 hit on Thursday, when it closed at 154.15/20.
The currency fell 0.4 percent this week, surrendering a 0.2 percent gain made last week.

“Some foreign banks were on the (dollar) buying side. There were some sizable remittance flows but the demand was heavy,” said a currency dealer.

Dealers expect a 2-3 percent depreciation in the rupee and higher volatility this year on account of debt repayment by the government.

President Maithripala Sirisena’s administration must repay an estimated Rs.1.97 trillion (US$12.85 billion) 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 bought Rs.5.9 billion worth of government securities this year up to Jan. 30, Central Bank data showed.
The rupee fell 2.5 percent last year and 3.9 percent in 2016.