Rupee ends steady in dull trade

Reuters: The Sri Lankan rupee ended steady in dull trade yesterday after it hit a record low in the previous session, as dollar-selling by banks offset importer demand for the greenback, dealers said.

The spot rupee ended at 158.50/60, little changed from Friday’s (1 June) close of 158.50/70.

The currency hit an all-time low of 158.80 per dollar on Friday, surpassing its previous low of 158.50 hit on 16 May. The currency has declined 3.3% so far this year.

“It was a dull day today. We have seen some (dollar) selling by a state bank, probably selling their own positions,” a currency dealer said.

Dealers said the rupee will be under pressure with exporters staying on the sidelines in anticipation of a fall in the unit, in line with other emerging market currencies.

The pressure on the currency is unwarranted as gross external reserves are at $9.1 billion, and the real effective exchange rate indexes indicate that the currency is competitive, the Central Bank has said.

Foreign investors sold Government securities worth a net Rs. 787.24 million ($4.97 million) in the week ended 30 May, bringing the outflow so far this year to Rs. 17 billion, Central Bank data showed.