Rupee closes firmer on exporter dollar sales

Reuters: The Sri Lankan rupee closed slightly firmer in dull trade yesterday (26 March) as exporter dollar sales and inward remittances surpassed demand for the US currency by importers, dealers said.

The rupee closed at 156.05/15 per dollar, compared with Friday’s close of 156.10/15.

“There was not much activity today, but the rupee ended tad firmer on exporter dollar sales,” said a currency dealer.

The rupee touched an all-time low of 156.20 per dollar on 19 March, a level it touched for the first time on 16 March. The rupee has weakened 1.69% so far this year after declining 2.5% last year and 3.9% in 2016.

The currency is expected to remain under pressure on continued importer demand for dollars ahead of the traditional New Year in mid April, dealers said.

A gradual depreciation in the rupee and higher volatility this year are expected on account of debt repayments by the Government, they added.

The International Monetary Fund said on 9 March that Sri Lanka’s economy remains vulnerable to adverse shocks due to its large public debt and low external buffers.

The government must repay an estimated Rs. 1.97 trillion ($12.68 billion) in 2018 - a record high - including $2.9 billion of foreign loans and a total of $5.36 billion in interest.

Foreign investors sold Government securities worth a net Rs. 211.7 million in the week ended 21 March, Central Bank data showed.