Rupee hits record low for second day on importer dollar demand

Reuters - The rupee hit a record low for a second day running on Friday due to dollar demand from banks and importers, but remittances and greenback sales by exporters checked the fall, dealers said.

The spot rupee ended at 154.30/35 per dollar, surpassing the previous low of 154.28 hit on Thursday, when it closed at 154.15/20.

The currency fell 0.4% this week, surrendering a 0.2% gain made last week.

Dealers expect a 2-3% depreciation in the rupee and higher volatility this year on account of debt repayment by the Government.

President Maithripala Sirisena’s administration must repay an estimated Rs. 1.97 trillion ($12.85 billion) in 2018 - a record high - including $2.9 billion of foreign loans and a total of $5.36 billion in interest.

Foreign investors bought Rs. 5.9 billion worth of government securities this year up to 30 January, Central Bank data showed.

The rupee fell 2.5% last year and 3.9% in 2016.

Sri Lanka’s stock, bond and foreign exchange markets are closed on Monday for a special holiday. Markets will resume trading on Tuesday.