Rupee edges down as banks buy dollars to cover import payments

REUTERS: The Sri Lankan rupee weakened yesterday, as demand for dollars from importers to pay for their purchases outweighed conversions of the greenback into local currency by exporters, dealers said.

The spot rupee, which traded at 153.19 per dollar earlier in the day, recovered to close at 153.10/20, but weaker from Wednesday’s closing level of 153.00/10.

“The importer demand was there throughout the day. Both state and foreign banks bought dollars to cover some import bills,” said a currency dealer who did not wish to be named.

The rupee has been under pressure since January after the Central Bank stopped defending the currency and started buying dollars to build up the country’s depleted foreign currency reserves.
The island nation has seen Rs.17.8 billion of net inflows into equities this year as of yesterday’s close, and Rs.17.3 billion worth inflows into government securities as of September 20 this year, official data showed.