Rupee hits record low on importer dollar demand

Reuters: The rupee hit an all-time low on Tuesday, as dollar demand from importers outpaced selling of the US currency by exporters, dealers said.

The rupee hit a record low of 157.35 against the dollar intraday, weakening further from its previous low of 156.90 hit on Monday.

It closed at 157.20/30, lower than Monday’s close of 156.85/95.

“Exporters are there, but the import demand is severe. The demand is there from oil and construction-related imports,” a currency dealer said. 

The rupee has weakened 2.3% so far this year. It dropped 2.5% last year and 3.9% in 2016. 

The Central Bank has bought around $ 400 million from the market in the first three months of this year to help build reserves and repay some debt. Dealers said they expect the rupee to gradually weaken and face higher volatility this year due to debt repayments by the government.

Foreign investors sold government securities worth a net Rs. 1.8 billion ($ 11.48 million) so far this year through 18 April, Central Bank data showed.

Stocks end weaker; cabinet reshuffle awaited

Reuters: The share index ended marginally lower in thin trading on Tuesday as continued political uncertainty dampened sentiment, stockbrokers said.

The market has been awaiting signs of political stability after President Maithripala Sirisena suspended parliament until 8 May. A cabinet reshuffle was expected on Monday, but government sources said it had been delayed.

The Colombo stock index ended 0.13% weaker at 6,516.71, its lowest close since 16 April. The index gained 0.88% last week.Turnover stood at Rs. 356.8 million ($ 2.3 million), less than a third of this year’s daily average of Rs. 1.2 billion.

Shares in Ceylon Tobacco Company Plc fell 1%, while Distilleries Company of Sri Lanka Plc closed 2.3% down and Softlogic Holdings Plc ended 4.0% weaker.

Foreign investors sold shares worth a net Rs. 25.8 million on Tuesday, but they have been net sellers of Rs. 1.2 billion worth of equities so far this year.