Rupee ends weaker on dollar buying by banks

Tuesday, 31 January 2017 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The Sri Lankan rupee ended weaker on Monday as some foreign banks bought dollars amid demand for the U.S. currency from importers, dealers said.

Rupee forwards were active, with two-week forwards ending at 151.00/10 per dollar, weaker from Friday’s close of 150.85/95.

The spot rupee was quoted around the central bank’s revised reference level of 150.25, dealers said.

“There was demand (for dollars). We have seen some foreign banks buying dollars for foreigners who are selling the (rupee) bonds,” a currency dealer said, requesting anonymity.

“We think that demand might continue for some time.”

The rupee will also face depreciation pressure due to seasonal importer dollar demand, dealers said.

The rupee has been under pressure due to rising imports and net selling of Government securities by foreign investors, while the Central Bank has said defending the currency was not sensible.

Foreign investors net sold Rs. 21.1 billion worth of Government securities in the three weeks to 25 January, according to the latest Central Bank data.