Rupee ends firmer on late exporter dollar sales

Tuesday, 28 February 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended firmer on Monday aided by late exporter dollar sales, but concerns over possible further depreciation in the absence of central bank guidance weighed on the sentiment, dealers said.

Rupee forwards were active with two-week forwards ending at 152.00/30 per dollar, compared with Thursday’s close of 152.50/70. They hit a low of 153.05 early in the trade on Monday.

The markets were closed on Friday for a religious holiday. “There was some selling from a state bank in the latter part of the day. Later, some other banks too sold,” said a currency dealer asking not to be named.

The currency is under pressure due to dollar demand from importers ahead of the traditional Sinhala-Tamil New Year in mid-April while foreign investors continue to sell government securities, dealers said.

Foreign investors sold a net Rs. 15.37 billion ($ 101.29 million) in the week ended 22 February, extending the outflow from government securities to Rs. 64.5 billion ($ 425.96 million) in the eight weeks.

Sri Lanka could face balance-of-payments pressure due to foreign outflows from government securities, a government document showed last week, even as the island nation is in the process of raising up to $ 2.5 billion from foreign borrowing.

The rupee has weakened 1.44% so far this year. It fell 3.9% last year, following a 10% drop in 2015.