Sri Lanka rupee ends weaker as state bank lowers exchange rate

The Sri Lankan rupee ended weaker on Monday after a state-owned bank pegged the currency’s exchange rate to the dollar at 133.80, 20 cents lower than its previous close, dealers said, amid demand for the greenback from importers.

The state-run bank had since July 2 sold dollars at 133.60 until Friday to keep the currency stable. On Monday, the rupee fell for the first time in seven sessions.

“The state bank is selling at 133.80,” a currency dealer said. “There was importer demand too.”

The currency has appreciated 0.3 percent through Monday since it hit a record low of 134.20 against the dollar on June 18.

The central bank may not be able to sustain the rupee’s appreciation trend as import demand could pick up due to lower interest rates, dealers and analysts said.

The pressure on the currency could also build if exporters stop selling dollars until after the Aug. 17 parliamentary elections, dealers said.

(Reuters)