Rupee ends steady near record low

Saturday, 5 December 2015 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee ended steady near its record low on Friday in dull trade as exporter dollar sales offset importer greenback demand and inward remittances, dealers said.

The rupee ended at 143.23/27 per dollar, compared with Thursday’s close of 143.22/27, and not far from an all-time low of 143.30 hit on 27 November.

“There were some exporter (dollar) conversions due to favourable euro rates,” said a currency dealer, asking not to be named.

On Friday the euro snapped back after soaring 3% on Thursday in its biggest one-day rally since March 2009 and third largest in its history.

“The Central Bank is also comfortable at these levels and we see state banks coming in when it (rupee) touches 143.20 and also they are not allowing the rupee to go beyond 143.25,” the dealer said.

Dealers said inward remittances for the festival season would ease the pressure on the local currency in the short term.

Prime Minister Ranil Wickremesinghe on Wednesday warned of pressure on the currency due to a China-led global slowdown and a possible Federal Reserve rate hike ahead of elections in the United States.

“We have got to remember that there will be pressure on our currencies and there’ll be an increase in financial market volatility as far as we are concerned,” he said.

Sri Lanka is to seek an IMF stand-by arrangement to fend off a risk that its economy will be hurt next year by repercussions from events affecting major economies.

IMF said on Thursday they do have concerns with the proposed 2016 Budget, which does not envisage significant consolidation relative to the expected out-turn for 2015 and Sri Lanka has not made a formal request for International Monetary Fund help but the fund’s staff are looking at ways to help the island nation.

Commercial banks parked Rs. 115.835 billion ($809.47 million) of surplus liquidity on Friday, using the Central Bank’s deposit facility at 6%, official data showed.

The Central Bank also absorbed a net Rs. 16.116 billion on Friday, data showed, which analysts attributed to the selling of Government securities.