Rupee forwards end weaker on importer dollar demand

Saturday, 21 May 2016 00:56 - - {{hitsCtrl.values.hits}}

Reuters - Sri Lankan rupee forwards ended weaker on Friday as dollar demand from importers surpassed dollar selling due to bond purchases by foreign investors, dealers said.

The dollar/rupee forwards, known as spot next, ended at 146.85/90 per dollar, from Thursday’s close of 146.75/80.

“There were dollar sales by a foreign bank after yesterday’s bond auction and some flood relief inflows. But importer demand was there,” a currency dealer said, asking not to be named.

Hopes faded for the survival of about 150 people trapped under mud and rubble of two landslides in Sri Lanka, as heavy rain hampered rescue operations. The death toll from the disaster rose to 64 on Friday.

After the markets closed, the Central Bank held key policy rates unchanged as expected, saying the expansion of “monetary and credit aggregates” was expected to gradually moderate from the current quarter of the year.

Finance Minister Ravi Karunanayake told parliament on Thursday that Japan will lend Sri Lanka more than $3.5 billion, mostly to finance development.

On Tuesday, Karunanayake told Reuters that the currency would stabilise in the 146.00 per dollar range in early June after money from an IMF loan flows in.

The Central Bank sold 44.69 billion rupees ($304.84 million)worth bonds at an auction on Thursday.

The spot currency did not trade on Friday.

The spot rupee reference rate has been pegged at 145.75, dealers said. Sri Lanka’s Central Bank had fixed the spot rate at 143.90 per dollar until 2 May.

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