Rupee at record low ahead of key policy statement

Reuters: The rupee fell 0.2% to end at a record low on Wednesday, due to higher demand for the dollar from importers, dealers said, a day ahead of a key Government policy statement.

The rupee ended at 141.50/60 per dollar, surpassing its previous all-time low of 141.40 hit on 28 September.

The currency fell from Tuesday’s close of 141.15/20 and lost for a fifth straight session.

“It is very difficult to predict what is likely to happen and we don’t know if the central bank wants to allow the rupee to depreciate further,” a currency dealer said asking not to be named.

Prime Minister Ranil Wickremesinghe is expected to announce the country’s medium-term economic policy framework after 1 p.m. (0730 GMT) on Thursday. Investors are also waiting to see some clarity on economic policies from the 2016 Budget announcement scheduled for 20 November. Commercial banks parked Rs. 123.48 billion ($872.96 million) of surplus liquidity on Wednesday, using the Central Bank’s deposit facility at 6%, official data showed.

The Central Bank also absorbed Rs. 147.349 billion on Wednesday, data showed, which analysts attributed to absorbing sovereign bond proceeds.