Rupee rises on exporter, bank dollar sales

Reuters: The rupee on Tuesday ended firmer for a third straight session on exporter and bank dollar sales, but the gains were capped by concerns about possible depreciation in the absence of Central Bank guidance, dealers said.

Rupee forwards were active with two-week forwards ended at 151.80/152.00 per dollar, compared with Monday’s close of 152.00/152.30.

“There were some inflows and exporter (dollar) sales,” said a currency dealer, who asked not to be identified.

Another dealer said a State bank sold dollars.

The rupee has been under pressure due to dollar demand from importers ahead of the traditional Sinhala-Tamil New Year in mid-April and as foreign investors continue to sell government securities, dealers said.

Foreign investors sold a net Rs. 15.37 billion ($ 101.62 million) in the week ended 22 February, extending the outflow from government securities to Rs. 64.5 billion.

Sri Lanka could face balance-of-payments pressure due to foreign outflows from government securities, a Government document showed last week, even as the island nation was in the process of raising up to $ 2.5 billion from foreign borrowing. The rupee has weakened 1.1% so far this year. It fell 3.9% last year, following a 10% drop in 2015.