Sri Lanka rupee slips on importer dollar demand
The Sri Lankan rupee closed slightly weaker on Monday as dollar demand from importers and banks surpassed mild selling of the U.S. currency by exporters, dealers said.
The spot rupee ended at 154.00/10 per dollar, compared with Friday’s close of 153.90/154.00.
“The demand (for dollars) from smaller banks was there today. The sellers were not willing to come down and sell,” said a currency dealer.
The rupee might witness volatility with the government’s heavy debt repayment this year, said dealers.
Sri Lanka raised $470.6 million on Thursday via development bonds, the central bank said, as the government faces unprecedented debt repayment this year.
President Maithripala Sirisena’s administration must repay an estimated 1.97 trillion rupees ($12.85 billion) in 2018 – a record high – including $2.9 billion of foreign loans, and a total of $5.36 billion of interest.
Foreign investors had sold 3.2 billion rupees worth of government securities this year up to Jan. 10, central bank data showed.
The currency fell 2.5 percent last year and 3.9 percent in 2016.
The central bank, while announcing its key economic policies for the year on Jan. 3, said it has allowed more flexibility in determining the exchange rate based on the present market conditions.
It added intervention policies will be adopted consistent with a flexible exchange rate regime and supportive of improving foreign exchange market functionality, and maintaining a competitive exchange rate will be an important objective.
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We have a Grandpa at the helm of the CB; this Grandpa has no idea of what he is doing.
The Global Financial System is bracing itself for a financial downturn in the order of the 2007 meltdown.
Have we measured risks? Have we commenced re-negotiating the massive loans that we have accumulated?
In the next 3 years, the exchange rate will be 1 USD=LKR 250.
Yahapalana will be compelled to sell more land to the cashed up Chinese!