Remittances, exporter conversions boost Sri Lanka rupee

(Reuters) – Sri Lanka’s rupee closed firmer on Wednesday as exporters and residents receiving remittances from workers abroad sold dollars ahead of festivals in April to mark the local new year.

The rupee strengthened to 129.20/129.30 per dollar from Tuesday’s close of 129.80/130.00. The currency has recovered 1.8 percent since it hit a record low of 131.60 on March 19.

Dealers see the rupee extending gains now that demand for imported commodities ahead of the festival season is easing, and the expatriate remittances boost the dollar supply.

The rupee has fallen 11.6 percent since the central bank stopped defending the currency on Feb. 9.

The stock market slipped in thin volumes on Wednesday as investors remained cautious of rising interest rates, the rupee’s volatility and an expected fall in corporate profits.

The nation’s main share index edged down 0.16 percent to 5,416.57. The day’s turnover was 627.2 million rupees ($4.83 million), well below this year’s daily average of 1.37 billion.

Foreign investors were net buyers of 39.2 million on Wednesday, extending the net foreign inflow so far this year to 20.2 billion rupees ($155.5 million).

The Colombo bourse is one of the worst performers this year among Asian markets, with a 10.8 percent loss.

T-bill yields rose between 21-25 basis points at auction on Wednesday with the 364-day T-bill rate hitting a 30-month high of 11.32 percent.


Source: Reuters