Rupee ends steady; dollar demand from banks, importers weighs

Reuters: The Sri Lankan rupee ended steady on Wednesday, but dollar demand from state banks and foreign banks put pressure on the currency, dealers said.

Rupee forwards SLKR were active, while spot-next forwards ended at 148.90/95 per dollar, unchanged from Tuesday’s close.

“State banks and foreign banks bought (dollars),” said a currency dealer, asking not to be named, adding that importer dollar demand and bond sales by foreign investors continued to pressure the rupee.

The pressure on the rupee is expected to ease when the seasonal inward remittances begin and importer dollar demand weakens ahead of the year-end festival season, dealers said.

However, a few dealers expect the rupee to continue to be under pressure on fears that US President-elect Donald Trump’s economic policies will lead to a stronger greenback and trigger foreign fund outflows.

On Tuesday, the Central Bank raised the spot preference rate by 20 cents to 147.50 per dollar, dealers added.

The spot rupee was hardly traded, but was quoted at 148.40/149.00.

Foreign investors have net sold Rs. 42.1 billion worth of Government securities in the seven weeks ended 30 November, ahead of an expected Fed rate hike in December.