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Sri Lankan rupee edges down on importer dlr demand, depreciation fears
February 27, 2017 / 6:56 AM / 10 months ago

Sri Lankan rupee edges down on importer dlr demand, depreciation fears

COLOMBO, Feb 27 (Reuters) - The Sri Lankan rupee traded weaker on Monday, hurt by strong importer dollar demand after a long weekend even as concerns of possible further depreciation in the absence of central bank guidance weighed on the sentiment, dealers said.

Rupee forwards were active with two-week forwards trading at 152.90/153.10 per dollar, compared with Thursday’s close of 152.50/70.

The markets were closed on Friday for a Hindu religious holiday.

“Pressure is there (on the rupee) due to importer dollar demand after three days of holidays,” said a currency dealer asking not to be named.

The currency is 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 sold a net 15.37 billion rupees ($101.29 million) in the week ended on Feb. 22, extending the outflow from government securities to 64.5 billion rupees ($425.96 million) in the eight weeks.

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 1.44 percent so far this year. It fell 3.9 percent last year, following a 10 percent drop in 2015.

Sri Lankan shares were down 0.23 percent at 6,124.10 as of 0633 GMT. Turnover was 808.29 million rupees ($5.33 million).

$1 = 151.7500 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan

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