Rupee slips on stock-related outflows; Gains seen on inflows
Tuesday, 8 April 2014 00:01
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REUTERS: The Sri Lankan rupee ended weaker on Monday due to dollar demand for stock-related outflows, but remittances from migrant workers and exporter dollar sales ahead of the festive season held the fall, dealers said.
The spot rupee ended at 130.68/70 per dollar, compared with Friday’s close of 130.60/65. It had strengthened to 130.40/50 per dollar in early trade on Friday.
“There were stock-related outflows, which brought the rupee down,” said one currency dealer.
Sri Lanka’s stock market had suffered 5.5 billion rupees ($ 42 million) worth of foreign outflows in the six sessions since 28 March due to the exit of a large foreign fund, brokers said.
Dealers said forward trades were active as banks were reluctant to trade above 130.70, a level seen as the central bank’s desired level.
Three-day forward or spot next ended at 130.71/72 per dollar, weaker than Friday’s close of 130.62/64.
Dealers said the rupee would likely trade between 130.50 and 130.80 in the short to medium term and could appreciate further if the central bank does not intervene.
The local currency had been steady at 130.70 per dollar for the six sessions through Wednesday, as dealers were reluctant to trade due to moral suasion by the central bank, before it appreciated on seasonal inflows.
Depreciation pressure is expected to ease due to expected inflows from remittances that will prompt dollar selling by banks.
The currency has gained 0.31 percent since 25 February, but has lost 0.06 percent so far this year, Thomson Reuters data showed.
