Rupee hits record low for seventh session

(Colombo) REUTERS: The Sri Lankan rupee hit an all-time low for a seventh straight session yesterday, dragged down by importer dollar demand amid less inflows of the greenback, dealers said.

The rupee, which hit a fresh record low of 161.43 early in the trade, closed at 161.40/50 per dollar, compared with Tuesday’s close of 161.20/30.

The local currency surpassed its earlier record of 161.30 hit in the previous session. The rupee declined 1.1 percent so far this month and 5.2 percent so far 
this year.

“The importer dollar demand was there today and there were less conversions,” a dealer said, requesting anonymity.

The rupee will be under depreciation pressure with the year-end seasonal importer demand, dealers said.

Absence of dollar conversions by exporters and outflows from equities and government securities also pushed the rupee lower, said analysts.

Exporters are holding on to dollars as they expect the local currency to decline further, dealers said.

The Sri Lankan currency is also hurt by weakness in the Indian rupee. India is Sri Lanka’s biggest trading partner and the country’s currency, which hit a record low on August 16, is one of the worst performers in Asia this year.

Foreign investors sold government securities worth a net Rs.7.5 billion  in the week ended August 21, bringing the outflow so far this year to Rs.47.4 billion, the Central Bank data showed.