Rupee ends marginally firmer in dull trade

Reuters: The Sri Lankan rupee ended marginally firmer in dull trade yesterday, as selling off dollars by banks surpassed mild demand for greenbacks from importers, traders said.

The rupee, which traded at 159.75 rupees per dollar during the day, ended firmer at 159.55/65 per dollar, compared with Tuesday’s close of 159.65/75. It has declined 3.9% so far this year and had hit a record low of 160.17 on 20 June.

“Trading was very dull today and there was not much of importer demand after the vehicle import tax hike,” said a currency dealer, asking not to be named.

The Finance Ministry yesterday imposed a minimum duty of Rs. 1.25 million on any hybrid car with an engine capacity of less than 1,000 cubic centimetres.

Sri Lanka’s Central Bank Governor Indrajit Coomaraswamy had said earlier that the rupee’s decline was driven mainly by factors outside of Sri Lanka, and that emerging-market currencies were under pressure.

Foreign investors sold government securities worth a net Rs. 4.6 billion ($28.83 million) in the week ended 25 July, bringing the outflows so far this year to Rs. 36.2 billion, Central Bank data showed.