Rupee ends weaker on importer dollar demand

Reuters : The Sri Lankan rupee ended slightly weaker on Friday due to late importer dollar demand, even as dealers expect the rupee to rise following $1.5 billion in inflows from a sovereign bond issue.

Sri Lanka raised $1.5 billion in its first sale of dual-tranche eurobonds on Monday, although at a lower borrowing cost than initially expected, as yield-hungry global investors put in over $5.5 billion in offers.

Earlier this week, Finance Minister Ravi Karunanayake said the rupee would “obviously appreciate” on inflows from the sovereign bond issue. Sri Lankan rupee one-week forwards, which have been acting as a proxy for the spot rupee, ended at 146.25/35 per dollar, weaker from Thursday’s close of 146.15/30.

The spot rupee is tightly managed by the central bank and market participants use the forward market levels for guidance on the currency.

“There was nothing much, but rupee ended weaker in thin trade as we saw some importer demand (for dollars) in the latter part of the day,” said a currency dealer, asking not to be named.

The spot rupee was not quoted, but the spot-next, which are rupee forwards settled three days after the spot rupee settlement, was steady at 146.00/15 per dollar, compared with Thursday’s close, dealers said.