Sri Lankan rupee edges down on importer dollar demand

Oct 05, 2016 (Reuters) – The Sri Lankan rupee edged down on Wednesday on mild importer dollar demand amid market expectation that the currency will remain under downward pressure ahead of the festival season, dealers said.

The spot rupee was at 146.80/85 per dollar at 0732 GMT, compared with Tuesday’s close of 146.70/75.

“The importer demand is slowly picking up. I think the rupee will be trading between 146.50-147.00 range until end of the year,” a currency dealer said on condition of anonymity.

The rupee has been under pressure due to importer dollar demand, posting a 0.65 percent decline last week.

Two dealers said there was neither intervention by the central bank nor direction by state banks. Usually the central bank steps into the market whenever there is volatility.

Finance Minister Ravi Karunanayake on Monday said the government wanted a strong currency through higher foreign inflows and without interventions.

The central bank has been under pressure from the International Monetary Fund (IMF) to continue rebuilding international reserves and maintain exchange rate flexibility to develop the foreign exchange market further.

Sri Lankan shares were down with the benchmark Colombo stock index was 0.25 percent weaker at 6,575.03 as of 0736 GMT. Turnover was at 358.6 million rupees ($2.45 million).