Rupee sinks to near record low

Tuesday, 24 April 2012 00:29 - - {{hitsCtrl.values.hits}}

Reuters: The rupee closed one per cent weaker at near an all-time low on Monday on importer dollar demand, shrugging off the Central Bank’s expectations of $ 574 million inflows within a month.

The rupee ended at 131.40/60 against the dollar, just firmer than the record low of 131.60 set on 19 March, and weaker than Friday’s close of 130.20/30. The lowest intraday trade was done at 130.50.

“Everybody will wait proper inflows coming into the market as rupee depreciation pressure is still there,” a currency dealer said on condition of anonymity.

The Central Bank said on Friday there was no need to intervene in the market as the country would see $ 574 million of inflows within a month.

But many dealers said the market would react only when the inflows come in and they believed the currency warranted further depreciation.

The currency has depreciated 13.1 per cent since the Central Bank stopped defending it on 9 February.

Sri Lanka’s stock market closed slightly weaker with a 0.04 per cent, or 2.07 points, fall to 5,455.06 as investors were waiting for direction amid uncertainty over the rupee’s depreciation, rising interest rates, slowing economic growth and corporate earnings.

A suspension of a 10 per cent price band on share-price movements failed to boost sentiment.

The day’s turnover was Rs. 246 million ($ 1.89 million), well below this year’s daily average of Rs. 1.31 billion.

The market, however, saw a net foreign inflow of Rs. 39.7 million, extending the net foreign buying to Rs. 21.3 billion in 2012.

The Colombo Bourse is one of the worst performing Asian markets this year, losing 10.2 per cent.