November 24, 2017 / 11:48 AM / a year ago

Sri Lankan rupee falls on importer dollar demand

COLOMBO, Nov 24 (Reuters) - The Sri Lankan rupee closed marginally weaker on Friday, as demand from importers for the U.S. currency outpaced dollar conversions by exporters and inward remittances, dealers said.

The spot rupee closed at 153.75/80 per dollar, compared with Thursday’s close of 153.65/75.

“There was remittance inflow today for salaries but the rupee ended a little weaker on importer dollar demand. General import demand was there,” said a currency dealer who declined to be identified.

“We can see some exporters booking forwards due to favourable forward premiums.”

Though the rupee is under pressure, it may not fall as much as the market previously expected, dealers said.

The market expected a 4 percent fall in the currency for 2017, while it has lost 2.7 percent so far this year.

However, the currency is expected to face pressure with imports of more low-end vehicles, on which the government has already reduced taxes.

The government imposed new taxes on high-end vehicles, telecoms, banks and liquor in a bid to boost revenues in its 2018 budget presented earlier this month.

Foreign investors were net buyers of equities worth 18.4 billion rupees ($120.4 million) this year as of Friday’s close. They were net buyers of government securities worth 45.7 billion rupees as of Nov. 15, official data showed. ($1 = 153.6500 Sri Lankan rupees) (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Biju Dwarakanath)

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