COLOMBO Feb 21 The Sri Lankan rupee declined
for a fifth straight session on Tuesday as offshore investors
sold government securities amid concerns over further
depreciation in the local currency, dealers said.
Dollar demand from importers and foreign banks also weighed
on the rupee, they said.
Rupee forwards were active with one-month forwards
closing at 153.20/35 per dollar, weaker than Monday's close of
Two-week forwards ended at 152.70/90 per dollar, weaker than
Monday's close of 151.70/75 per dollar.
"There was no supply (of dollars) in the market and there
were outflows with foreigners selling government rupee bonds,"
said a currency dealer, requesting not to be named.
Sri Lanka could face balance-of-payments pressure due to
foreign outflows from government securities, a government
document showed on Thursday, even as the island-nation is in the
process of raising up to $2.5 billion from foreign borrowing.
Foreign investors net sold 49.1 billion rupees ($325.70
million) worth of government securities in the seven weeks to
Feb. 15, more than the total net foreign outflow of $324.3
million in 2016, according to the latest central bank and
Finance Minister Ravi Karunanayake said on Feb. 14 that
protecting a fragile rupee was more important than controlling
interest rates as the local currency tended not to rebound after
Central Bank Governor Indrajit Coomaraswamy said early this
month that the bank was not planning to abruptly stop supporting
The rupee has weakened 1.1 percent so far this year, under
pressure from rising imports and net selling of government
securities by foreign investors.
It fell 3.9 percent last year, following a 10 percent drop
($1 = 151.0000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas