Rupee down

Tuesday, 3 July 2012 02:07 - - {{hitsCtrl.values.hits}}

The Sri Lankan rupee edged down on Monday in thin trade on importer dollar demand, dealers said.

The rupee closed at 133.80/90 to the dollar, slightly weaker than Friday’s close of 133.50/70. It hit another in a series of fresh record lows on Thursday, at 134.30.

“Still we see pressure on the rupee due to high oil bills of around $20 million on average per day,” a currency dealer said.

Sri Lanka’s central bank has taken several stringent policy measures this year aimed at cutting imports, including raising policy rates twice to two-year highs and restricting credit growth, but a prolonged drought has increased oil imports for thermal power.

Currency dealers said the market was slow due to a public holiday on Tuesday, before which many traders were on holiday.

The central bank, which was a big buyer of dollars last month, told Reuters on Friday that Sri Lanka had met all June-end IMF targets for the last tranche of a $2.6 billion loan.

Dealers expect pressure on the rupee to ease if the central bank stops aggressive dollar buying.

The rupee has lost 17.5 percent of its value since November, when the government allowed a 3 percent devaluation. The sharp fall drove the island nation’s annual inflation rate to a 41-month high in June, data showed on Friday.