COLOMBO, March 3 The Sri Lankan rupee was
slightly higher in dull trade on Friday as exporter dollar sales
surpassed demand for the greenback by importers, dealers said.
Rupee forwards were active, with two-week forwards
trading at 151.85/95 per dollar at 0602 GMT, compared with
Thursday's close of 151.90/152.00.
However, 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 government securities.
Sentiment was also hit after 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.
Sri Lankan shares were down 0.06 percent at 6,123.57,
as of 0606 GMT. Turnover stood at 152.3 million rupees ($1.01
($1 = 151.1000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil