Reuters logo
Sri Lankan rupee falls on importer dollar demand; stocks down
March 2, 2017 / 8:43 AM / 9 months ago

Sri Lankan rupee falls on importer dollar demand; stocks down

COLOMBO, March 2 (Reuters) - The Sri Lankan rupee traded weaker on Thursday as importer dollar demand surpassed greenback sales by exporters, dealers said.

Rupee forwards were active with two-week forwards trading slightly weaker at 151.80/90 per dollar at 0749 GMT, compared with Wednesday’s close of 151.70/80. They rose in the past four sessions.

“Today we can see some (importer) demand,” said a currency dealer, on condition of anonymity.

Moody’s in a report said lower agricultural exports and higher imports will make up for the loss in domestic production. The drought will weigh on Sri Lanka’s current account deficit and foreign-exchange reserve buffers, while the government’s handouts for farming families could make the fiscal deficit target a challenge.

Lower agricultural output due to severe 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.

The rupee is also 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 around 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 0.11 percent at 6,114.96, as of 0803 GMT. Turnover was 640.2 million rupees ($4.23 million).

$1 = 151.2000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips

Our Standards:The Thomson Reuters Trust Principles.
0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below