5-day rupee forwards end lower as importers buy dollars

Thursday, 7 April 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters : Sri Lankan five-day rupee forwards ended weaker for the first time in five sessions on Wednesday as demand for the dollar from importers outpaced the sale of the greenback by banks via exporters and inward remittances ahead of the Sinhala-Tamil new year next week, dealers said.

The forwards, which are called spot next and act as a proxy for the spot currency, ended at 144.90/145.20 per dollar, compared with Tuesday’s close of 144.70/80.

The spot rupee, which has not been active since Jan. 27, did not actively trade. The Central Bank has fixed the spot rupee’s trading price at 143.90 through moral suasion, dealers said. Central Bank officials were not available for comment. “There were some importer (dollar) demand,” said a currency dealer.

Sri Lanka will celebrate the Sinhala-Tamil new year on April 13 and 14.

The one-week forwards, which were hovering near record lows last week, also did not actively trade on Wednesday for the fifth straight session, dealers said.

The rupee has been under pressure due to foreign investors exiting government securities and amid the country’s economic woes.

Sri Lanka borrowed 25 % more in 2015 than it did in 2014 due to the high cost of refinancing loans raised by the previous government without parliamentary approval.