COLOMBO, March 3 The Sri Lankan rupee ended
slightly higher on Friday as exporter dollar sales and inward
remittances surpassed demand for the greenback by importers,
Rupee forwards were active, with two-week forwards
ending at 151.80/90 per dollar, compared with Thursday's close
"The importer demand was there, but it was outweighed by
inward remittances and exporter conversions," said a currency
dealer on condition of anonymity.
"We can see some import demand on the pipeline. If we don't
get exporter flows, we will see the rupee depreciating again
with growing imports."
Dealers said the rupee would be under pressure due to dollar
demand from importers ahead of the traditional Sinhala-Tamil New
Year in mid-April, and as foreign investors continue to sell
Ratings agency Moody's said in a report that lower
agricultural exports and higher imports to make up for the loss
in domestic production would weigh on the current account
deficit and foreign exchange reserves.
The government's handouts to farming families affected by
drought could make the fiscal deficit target a challenge,
Lower agricultural output due to the drought will force the
government to increase imports, dealers said. For further
imports, the government needs more U.S. currency while there
will be fewer dollars coming in from agriculture commodity
exports. Both will increase the demand for the greenback and put
pressure on the rupee.
Sri Lanka's fuel imports in January jumped to double the
typical monthly levels, with the country rushing to plug an
energy shortfall as severe drought hits its hydropower output,
industry sources said.
Foreign investors sold a net 15.37 billion rupees ($101.62
million) of government securities in the week ended Feb. 22,
extending the outflow from such instruments to 64.5 billion
Sri Lanka could face balance-of-payments pressure due to
foreign outflows from government securities, a government
document showed last month, even as the island nation was in the
process of raising up to $2.5 billion from foreign
The rupee has weakened 1 percent so far this year. It fell
3.9 percent last year, following a 10 percent drop in 2015.
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by