October 24, 2017 / 12:00 PM / in a year

Sri Lankan rupee ends lower on importer dollar demand

COLOMBO, Oct 24 (Reuters) - The Sri Lankan rupee ended weaker on Tuesday, as demand for the U.S. dollar by importers surpassed mild exporter selling of the greenback, dealers said.

The spot rupee which traded at 153.90 per dollar during the day, closed at 153.80/85, weaker from Monday’s close of 153.75/80.

“The importer demand is there. We didn’t see much exporter (dollar) sales as they are reluctant to sell, expecting further depreciation,” said a currency dealer, requesting anonymity.

“We expect the rupee to weaken around 4.0-4.5 percent for the whole year.”

The rupee has slipped 2.8 percent so far in the year.

The rupee came under pressure early this month due to dollar demand from state-run Ceylon Petroleum Corp (CPC), which stocked up crude oil ahead of an expected fuel price hike, dealers said.

Crude prices are expected to rise after private fuel retailer Lanka IOC said it was likely to hike rates as it has been selling at a loss, local media reported late last month.

The currency was expected to weaken on generally higher import demand ahead of the national budget, dealers said.

The rupee has been under pressure since January after the central bank stopped defending the currency and started buying the dollar to build the country’s depleted foreign reserves.

The island nation has seen 19.4 billion rupees ($126.18 million) of net inflows into equities this year as of Tuesday’s close, and 38.2 billion rupees into government securities as of Oct. 18, official data showed. ($1 = 153.7500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)

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