Rupee edges down on importer dollar demand

Reuters: The rupee ended slightly weaker on Thursday as importer dollar demand surpassed sales of the US currency by banks, dealers said.

The spot rupee, which fell as low as 153.35 per dollar in early trade, closed at 153.20/30 per dollar, compared with Wednesday’s close of 153.15/20.

“There was some importer demand. With the demand, it traded at 153.35. But we have seen some dollar selling which eased the pressure,” a currency dealer said, requesting anonymity.

Dealers said there was no intervention from the Central Bank.

Sri Lanka’s Central Bank is targeting a more flexible exchange rate regime, the Government said last week in a document outlining its policies to the International Monetary Fund.

The Central Bank has intervened in the foreign exchange market since late February only to build up reserves or to stem excessive movements in the exchange rate, and will continue to do in the future as well, the document released by the IMF showed.

The banking regulator held its policy rates steady earlier in the month and said tightening measures are helping cool inflation and credit growth, signalling receding concerns about price pressure as it focuses on supporting an economy hit by extreme weather.