Rupee closes marginally weaker as banks, importers buy dollars

Reuters: The rupee ended slightly weaker yesterday in dull trade as banks and importers bought dollars, dealers said.

The spot rupee, which traded at 153.80 per dollar during the day, ended at 153.75/85 per dollar, compared with 26 January’s close of 153.65/75. The rupee gained 0.2% last week. “Today, there was some demand from foreign banks during the latter part. But the demand was not that big,” said a currency dealer.

Dealers expect a 2-3% depreciation in the rupee and higher volatility this year on account of debt repayment by the government.

Sri Lanka mopped up Rs. 80 billion ($ 520.66 million) yesterday via treasury bonds after raising $ 470.6 million on 18 January via development bonds, the Central Bank said.

President Maithripala Sirisena’s administration must repay an estimated Rs. 1.97 trillion ($ 12.85 billion) in 2018 - a record high - including $ 2.9 billion of foreign loans, and a total of $ 5.36 billion in interest.

Foreign investors bought Rs. 3.9 billion worth of government securities this year up to 24 January, Central Bank data showed.

The rupee fell 2.5% last year, and 3.9% in 2016.