Rupee weaker on importer dollar demand; stocks up

REUTERS: The Sri Lankan rupee edged down yesterday due to importer dollar demand and a lack of exporter sales, but selling of the greenback by a state bank capped further fall in the domestic currency, dealers said.

They added the moral suasion by the Central Bank discouraged trading in the spot currency market.
Rupee forwards were active, with the spot-next trading at 148.05/15 per dollar, weaker than its previous close of 147.95/148.05.

The spot rupee was quoted at 146.90/95 per dollar, but there were hardly any trades.
“The (importer dollar) demand is there and the rupee is under pressure as there are not much of inflows,” a currency dealer said, asking not to be named.

“A state bank was seen selling dollars, but we are not sure if it was on the instructions of Central Bank or it was selling its 
own positions.”
The spot rupee is usually managed by the central bank, and market participants use the forward market levels for guidance on the currency. Officials from the Central Bank were not available for comment.

Dealers also said foreign selling in government securities also put pressure on the currency. Foreign investors sold Rs.8.79 billion ($59.84 million) worth of government securities in the week ended October 19, data from the Central Bank showed.

Dealers said the market was waiting for some direction from the national budget due on November 10. Sri Lankan shares trading firmer, with the benchmark Colombo stock index 0.2 percent firmer at 6,431.28 as of 0630 GMT. Turnover stood at 
Rs.49.9 million.