Rupee weaker on importer dollar demand

Reuters: Importer dollar demand drove Sri Lanka’s rupee down despite a low supply for the local currency caused by an earlier Central Bank order to commercial banks to unwind some dollar positions.

The rupee closed at 121.50/70 a dollar, down from Thursday’s close of 121.10/30 The rupee has fallen six per cent since 9 February, when the Central Bank stopped defending it.

A Reuters monthly forex poll has forecast the rupee to fall as far as 128.50 by the end of August.  The stock market meanwhile closed flat in thin volume as many investors stayed away on fears of slowing economic growth, rising interest rates and broadly flat December quarter profits. The main share index fell 0.24 points to hit 5,456.27.The main share index fell 0.24 points to hit 5,456.27.

The day’s turnover was Rs. 381.3 million ($ 3.14 million) well below last year’s daily average of Rs. 2.3 billion. The day’s volume was Rs. 16.3 million. Last year’s daily average was a record Rs. 102.7 million.

Foreign investors bought shares worth Rs. 50.3 million, extending the offshore net foreign inflow to Rs. 2.77 billion so far this year, after a net outflow of Rs. 19.1 billion last year.

The Colombo Bourse is one of the worst performers this year among Asian markets, with a 10.2 per cent loss while the majority has had positive returns.