Rupee firms on remittances; Budget clarity awaited

Saturday, 11 November 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee edged higher on Friday on dollar inflows from remittances, while the market awaited more clarity on the Budget policies announced a day earlier, dealers said.

The Government imposed new taxes on motor vehicles, telecoms, banks and liquor in a bid to boost revenues, in the 2018 budget outlined on Thursday, as the budget deficit for the current year slipped to 5.2% of the GDP.

The spot rupee closed at 153.55/60 per dollar, compared with Thursday’s close of 153.60/70.

“There were some remittances and the market is still waiting for some clarity over policies announced in the budget,” a currency dealer said asking not to be named.

“The Budget is neither disappointing nor surprising and had policy consistency. There are some proposals to boost foreign inflows through investments, which will help the rupee.”

Finance Minister Mangala Samaraweera on Wednesday announced tax concessions worth a monthly Rs. 1.5 billion ($9.8 million). The presentation of Thursday’s Budget ended after Sri Lanka’s markets closed.

The rupee has slipped 2.6% so far this year.

The island nation has had Rs. 18.2 billion ($118.53 million) worth of net inflows into equities this year as of Friday’s close, and Rs. 44.3 billion into Government securities as of 8 November, official data showed.