Rupee slides to 6-week low, bond sales weigh

12 Jun 2013 - {{hitsCtrl.values.hits}}

Sri Lanka's rupee hit a six-week low yesterday, weighed down by banks' demands for dollars to settle bond-related sales and importer buying of the U.S. currency, dealers said.

The rupee hit 127.20/30 per dollar in intraday trade on Tuesday, its lowest since April 26 and 0.53 percent weaker than Monday's close of 126.55/60, Thomson Reuters data showed.

Four dealers said the lowest deal was done at Rs.127.30. “We see some smalltime bondholders pulling back with the U.S. treasury yields moving upward,” one currency dealer said on condition of anonymity.

“They are also concerned over interest rates further coming down after the Central Bank’s comments.”

Dealers also said importers were buying dollars on concerns that the local currency may depreciate further.

The Central Bank governor, after holding key policy rates steady on Friday, said the monetary authority would issue guidelines to direct banks to cut lending rates and narrow the gap with the inflation rate.

The rupee is still 0.24 percent up so far this year, following a 10.7 percent depreciation in 2012 as the Central Bank allowed for a flexible exchange rate regime in February last year.

(REUTERS)

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Rupee slides to 6-week low, bond sales weigh

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