Rupee ends weaker on importer dollar demand

Thursday, 29 September 2016 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee posted its third straight session of losses on Wednesday, as the dollar demand from importers exceeded greenback sales by exporters, dealers said.

The spot rupee ended at 146.62/70 per dollar, compared with Tuesday’s close of 146.45/50. “There was a good demand though it was not supported by the export selling and remittances,” said a currency dealer asking not to be named. “There were some quarter end-dollar demand too.”

Sri Lanka’s Central Bank held its key policy interest rates steady on Wednesday, a widely expected decision that analysts say suggested policy makers were keen to support a slowing economy even as they kept a tight leash on rampant credit growth.

The bank has tightened policy three times since December.

Private sector credit growth was at 28.5% year-on-year in July, its highest since August 2012, but last month the Central Bank chief Indrajith Coomaraswamy said he expected the credit expansion rate to slow to 18% by the end of 2016.

The Central Bank is also under pressure from the International Monetary Fund (IMF) to continue to rebuild international reserves and maintain exchange rate flexibility to further develop the foreign exchange market.