Rupee forwards down for 3rd session on importer dollar demand

Wednesday, 21 January 2015 01:20 - - {{hitsCtrl.values.hits}}

Reuters: Rupee forwards ended weaker for a third straight session on Tuesday on dollar demand from importers as lower interest rates and depreciation in some foreign currencies versus the rupee paved the way for more imports, dealers said. Exporters, however, were waiting for clarity on economic policy from President Maithripala Sirisena’s new Government ahead of a scheduled interim budget on 29 January, they said. Four-day forwards, which were actively traded, closed lower at 132.75/85 per dollar, compared with Monday’s close of 132.51/60. “There was importer (dollar) demand and the exporters were reluctant to convert,” said a currency dealer. Dealers said the recent depreciation in Japanese Yen, Euro and lower interest rates have encouraged more imports. Dealers expect the rupee currency to be steady or move downward with little volatility until March before seasonal imports pick up. Sirisena, who announced an interim cabinet on 12 January, said he would carry out reforms to fight corruption in the 100 days to a Parliamentary election. The market is expecting a flexible exchange rate with more foreign grants under the new Government as opposed to controlled exchange rate regime earlier. The spot currency was not traded on Tuesday. Sri Lankan spots traded in a band between 130.00 and 131.75 rupees throughout 2014, following the Central Bank’s move to limit volatility in the currency and ensure a stable exchange rate.

Secondary market bond yields increase marginally ahead of weekly bill auction

By Wealth Trust Securities The buying interest witnessed in secondary bond markets over the previous three days was seen reducing yesterday driving yields up marginally ahead of today’s weekly Treasury bill auction. Activity was witnessed mainly on the liquid maturities of 1 July 2019 and 1 July 2022 within the range of 7.38% to 7.45% and 7.88% to 7.94% as it reflected marginal increases in comparison to its previous day’s closing levels as volumes changing hands moderated. Furthermore, continued selling interest on secondary market bills saw the 91 day and 364 day bills been offered at levels of 5.80% to 5.85% and 6.00% to 6.05% respectively. At today’s auction, a total amount of Rs. 10 billion will be on offer in comparison to its previous weeks total offered amount of Rs. 15 b, which will consist of Rs. 1.5 b on the 91 day, Rs. 2.5 b on the 182 day and Rs. 6 b on the 364 day maturities. At last week’s auction, weighted averages increased by three basis points each on the 91 day and 182 day maturities to 5.79% and 5.89% respectively while the 364 day increased by four basis points to 6.04%.Meanwhile, in money markets, surplus liquidity stood at Rs. 25.41 b yesterday as the Open Market Operations (OMO) department of Central Bank was seen mopping up Rs. 14.66 billion on a three day basis at a weighted average of 5.88%. Overnight call money and repo rates decreased further to average 5.82% and 5.18% respectively yesterday. Rupee dips further The USD/LKR rate on spot next contracts was seen dipping further yesterday to a daily low of Rs. 132.75 on the back of continued importer demand in comparison to its previous day’s closing of Rs. 132.45/55. The total USD/LKR traded volume for 19 January was $ 60.83 million. Some of the forward USD/LKR rates that prevailed in the market were one month – 133.40; three months – 134.15; and six months – 135.45.