Home / Front Page / Rupee ends weaker, state bank dollar sales cap fall

Rupee ends weaker, state bank dollar sales cap fall


Comments / 798 Views / Saturday, 20 May 2017 00:20


Reuters - The rupee ended weaker on Friday on importer dollar demand and fewer exporter conversions, even as investors said the currency could weaken further after the Central Bank decided to buy dollars directly from the market to boost reserves.

Dealers said the state bank dollar sales curbed further decline.

Rupee forwards were active, with spot-next forwards ending at 152.90/153.00 per dollar, compared with Thursday’s close of 152.85/90. One-week forwards ended at 153.15/30, compared with the previous session’s close of 152.95/153.00.

The Central Bank is targeting $1.2 billion in direct market purchases of dollars to boost the island nation’s reserves this year, CB Governor Indrajit Coomaraswamy said on Thursday.

That comes after Sri Lanka missed its December-end reserves target agreed with the International Monetary Fund (IMF) for a $1.5 billion, 36-month loan.

Coomaraswamy said the Central Bank has purchased around $400 million directly from the market so far this year.

“There was some (dollar) demand from a foreign bank probably for bond outflow. A state bank sold dollars which prevented the fall,” a currency dealer said, asking not to be named.

“Exporters are not converting after the Central Bank announcement. They are watching the situation and we can see some importer demand.”

Dealers said it was not clear whether the state banks sold dollars on behalf the Central Bank.

Central Bank officials were not immediately available for comment.

The spot rupee did not trade on Friday.

The Central Bank fixed the spot rupee reference rate at 152.50 on 5 May.

The Central Bank has allowed the currency to gradually depreciate since mid-December, revising its spot reference rate multiple times.


Share This Article


COMMENTS

Today's Columnists

Sri Lanka must move from politics to business

17 August 2017

Last week, the Yahapalana Government, which came on the promise of good governance and weeding out corruption, had its first blow, when a senior minister and deputy leader of the party had to resign over allegations of corruption. Whilst the sha...


Failures in education drag the country down

17 August 2017

When the country received independence in 1948, the administration and education was of extremely high standard. In 1956, the S.W.R.D. Bandaranaike Government made Sinhala the Official Language and converted education to Swabasha, includi...


Three things to ponder on the 150th Anniversary of the World’s Finest Tea

16 August 2017

The Colombo International Tea Convention 2017 concluded on Friday, elegantly supported by our most accomplished cricketer and commended by several of the international delegates as the most significant gathering of the global tea industry. For ma...


Ravi K’s altruistic suicide!

15 August 2017

Ravi Karunanayake sacrificed his pride and position by tendering his resignation to save the Maithri-Ranil Government cabal. He could have faced and defeated the no confidence motion against him if Maithri (who owes his presidency to Ravi) and Ran...


Columnists More