Rupee at four-week low on seasonal importer dollar demand
Thursday, 7 November 2013 00:00
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REUTERS: The Sri Lankan rupee failed to hold on to earlier gains and ended slightly weaker on Wednesday at a four-week closing low as early exporter dollar conversions outpaced the year-end seasonal importer demand, dealers said.
The spot rupee ended at Rs. 131.07/15 per dollar, its lowest close since 8 October and slightly weaker from Tuesday’s close of Rs. 131.05/15.
Dealers said the rupee is under downward pressure due to year-end importer demand for the greenback until mid December and then could reverse the trend due to expected inflows from foreign remittances by Sri Lankan expatriates during the festive season.
Analysts said the currency is under falling trend in the long term due to lack of foreign inflows from exports and foreign direct investments and the dollars keeping the rupee steady were mainly from external borrowing.
Central Bank Governor Ajith Nivard Cabraal on Friday said the rupee could come under pressure due to importer dollar demand, for consumer-related goods ahead of the December festival season, but the market could manage the demand “itself without much intervention”.
The rupee hit a record low of Rs. 135.20 on 28 August, but has managed to stem further losses and is up 3.11% since then.
