Rupee rises on inward remittances, exporter sales of dollar

Reuters: The Sri Lankan rupee closed higher yesterday (2 April) as dollar selling by exporters and inward remittances surpassed importer demand for the US currency, dealers said.

The rupee, which traded at 155.60/75 per dollar earlier in the session, gained 0.3% and closed at 155.15/20 per dollar, compared with Thursday’s (29 March) close of 155.50/70.

The rupee gained 0.4% last week. The markets were closed for a holiday on Friday (30 March).

The currency has recovered and risen 0.7% since it hit a record low of 156.20 per dollar on 16 March. The rupee has weakened 1.43% so far this year after declining 2.5% last year and 3.9% in 2016.

“There was (dollar) demand in the morning, but some selling by exporters and also inflows due to inward remittances came in, and the rupee ended firmer,” said a currency dealer.Dealers expect pressure on the currency to ease with more inward remittances ahead of the traditional New Year in mid-April.

A gradual depreciation in the rupee and higher volatility are expected this year on account of debt repayments by the Government, dealers have said.

The International Monetary Fund said on 9 March that Sri Lanka’s economy remained vulnerable to adverse shocks due to its large public debt and low external buffers.