Rupee firms in dull trade

REUTERS: The Sri Lankan rupee slightly firmed yesterday from a record low close as some exporters sold dollars, dealers said.

The rupee weakened to an all-time lowest close of 154.60/70 per dollar on Tuesday, marking its third successive record low close, hurt by dollar demand from banks and importers.

The spot rupee ended at 154.55/65 yesterday.

“It was a dull day. There was not much activity besides some exporter conversions,” said a currency dealer.

“But we expect the pressure (on the rupee) to continue with continued importer dollar demand.” 

Dealers expect a 2-3 percent depreciation in the rupee and higher volatility this year on account of debt repayment by the government. President Maithripala Sirisena’s administration must repay an estimated Rs.1.97 trillion in 2018 - a record high - including US $ 2.9 billion of foreign loans and a total of US $ 5.36 billion in interest.

Foreign investors bought Rs.5.9 billion worth of government securities this year up to January 30, the Central Bank data showed. The rupee fell 2.5 percent last year and 3.9 percent in 2016.