Rupee at near record low; spot prices unquoted

Reuters: The Sri Lankan rupee traded at a near record low on Monday in thin trade and many banks stopped quoting spot prices.

The rupee traded at 132.90 to the dollar, with a state bank selling dollars at that level, traders said. The rupee hit a record low of 133.60 on June 12.

Five dealers said there was no interbank spot quote by the end of the day and the highest spot-next trade was done above 134 per dollar.

“Effectively, there is no interbank spot trading. What is happening is dealers buy (dollars) from exporters and sell to importers,” said a currency trader on condition of anonymity.

“There were some spot deals done at 132.90 in early trade. Many importers were desperate for dollars.”

Four currency dealers told Reuters that some banks had stopped quoting spot rates after the central bank told the traders not to trade above 133.00. Central Bank Governor Ajith Nivard Cabraal declined to comment. The Sri Lanka Forex Association (SLFA), a body which represents all the currency dealers, said quoting spot was an individual decision based on each dealer’s position and risk appetite.

Standard Chartered Bank’s take on interest and Forex rates