April 12, 2017 / 11:55 AM / 4 months ago

Sri Lankan rupee ends down; importer dollar demand outpace remittances

COLOMBO, April 12 (Reuters) - The Sri Lankan rupee ended weaker on Wednesday as importer dollar demand and dividend payments outpaced mild inward remittances ahead of the new year holidays, dealers said.

Rupee forwards were active, with two-week forwards ending at 153.50/60 per dollar, compared with Tuesday's close of 153.30/45.

"There was demand (for dollar) from a foreign bank and we have seen some demand from small banks as well. But conversions are very less as most of the companies are closed for the new year," said a currency dealer, who requested anonymity.

Sri Lanka will celebrate its traditional new year this week and markets will be closed on Thursday and Friday.

The rupee has been under pressure due to increased seasonal imports ahead of the new year, although dealers expect the pressure to ease with seasonal inward remittances.

Outflows due to rupee bond sales by foreign investors have also been putting pressure on the currency.

Foreign investors net bought government securities worth 259.5 million rupees ($1.71 million) in the week ended April 5. However, they net sold 63.9 billion rupees worth of such instruments so far this year.

$1 = 151.6000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips

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