COLOMBO Feb 23 The Sri Lankan rupee ended
firmer on Thursday as exporters sold the U.S. dollar, but
concerns over possible further depreciation in the domestic
currency in the absence of central bank guidance weighed on the
sentiment, dealers said.
Rupee forwards were active with two-week forwards
ending at 152.50/70 per dollar, compared with Wednesday's close
of 153.40/70. It hit a low of 153.70 in early trade.
The two-week forwards had fallen one percent since Monday
through Wednesday, before rising 0.6 percent on Thursday.
"There were some exporter conversions which helped the rupee
forwards to end firmer," said a currency dealer asking not to be
The currency continued to be under pressure due to dollar
demand from importers ahead of the traditional Sinhala-Tamil new
year in mid-April, while foreign investors continue to sell
government securities, dealers said.
Foreign investors have net sold $325.70 million worth of
securities in the seven weeks to Feb. 15, surpassing the total
net foreign outflow of $324.3 million in the comparable period
in 2016, according to the latest central bank and government
The currency weakness comes at a time when a mission from
the International Monetary Fund (IMF), which has asked the
central bank to maintain a flexible exchange rate, is in Colombo
for the second review of a $1.5 billion loan.
Sri Lanka could face balance-of-payments pressure due to
foreign outflows from government securities, a government
document showed last week, even as the island-nation is in the
process of raising up to $2.5 billion from foreign borrowing.
The rupee has weakened 1.1 percent so far this year. It fell
3.9 percent last year, following a 10 percent drop in 2015.
The forex market will remain closed on Friday for a Hindu
($1 = 151.7500 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas