August 27, 2013 / 12:12 PM / 4 years ago

Sri Lanka rupee falls to over 1-year low on importer dollar demand

COLOMBO, Aug 27 (Reuters) - The Sri Lankan rupee fell
to a more than one-year low against the dollar on Tuesday due to
importer demand for the greenback amid renewed selling of
government bonds by foreign investors.
    The market expects the rupee to fall further with exporters
holding onto dollars and foreign investors gradually exiting
treasury bonds.
    Dealers said banks switched to one-day currency forwards in
an inactive spot market.
    The spot rupee fell to 133.00 per dollar, its lowest since
July 19, 2012,  Thomson Reuters data showed. It had closed at
132.70 on Monday.
    The spot next or one-day forward closed at 132.10/20 per
dollar, compared with Monday's close of 132.80/90.
    "Importer dollar demand pushed the spot next down and the
demand from foreign bondholders is also there," a dealer said.
    The rupee fell around 4 percent between June 7 and July 18,
after foreign investors started pulling out of Sri Lanka's
treasury bonds due to a rise in U.S. treasury yields. The
benchmark 10-year note yield is hovering around a
two-year high at 2.7616 percent.

 (Reporting by Ranga Sirilal; Editing by Subhranshu Sahu)

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