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Sri Lankan rupee firmer on exporter dollar sales; stocks down
March 1, 2017 / 7:14 AM / 9 months ago

Sri Lankan rupee firmer on exporter dollar sales; stocks down

COLOMBO, March 1 (Reuters) - The Sri Lankan rupee edged up on Wednesday as greenback sales by exporters outpaced mild importer dollar demand, dealers said.

Rupee forwards were active with two-week forwards trading little changed at 151.75/95 per dollar at 0643 GMT, compared with Tuesday’s close of 151.80/152.00.

Spot rupee traded at 151.25/40 per dollar.

“Buying from foreign banks is happening, but we can see a state bank selling (dollars) time-to-time. I don’t think it is the intervention. They must be selling their positions,” said a currency dealer, who asked not to be identified.

Dealers added that exports could be hurt as severe drought has affected the production of tea and other commodities.

“The rupee will be under pressure with higher oil imports due to drought,” the currency dealer said.

The rupee has been 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, dealers stated.

Sri Lanka’s fuel imports in January jumped to double 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) in the week ended Feb. 22, extending the outflow from government securities to 64.5 billion rupees.

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 was in the process of raising up to $2.5 billion from foreign borrowing.

The rupee has weakened 1.0 percent so far this year. It fell 3.9 percent last year, following a 10 percent drop in 2015.

Sri Lankan shares were down 0.15 percent at 6,125.01, as of 0700 GMT. Turnover was 161.7 million rupees ($1.07 million).

$1 = 151.1000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips

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