Sri Lankan rupee edges up on exporter dollar sales; stx up

rupee

Nov 30, 2016 (Reuters) – The Sri Lankan rupee was trading slightly higher on Wednesday, as exporter dollar sales surpassed importer demand for the greenback after the central bank said it was in advance talks with China Development Bank for a $200 million swap.

However, dealers expect the rupee to be under pressure till seasonal inward remittances begin.

Rupee forwards were active while spot-next forwards were trading at 149.00/10 per dollar at 0652 GMT, compared with Tuesday’s close of 149.15/25.

“There is some selling today. Probably the central bank’s announcement of $200 million swap could ease the pressure,” said a currency dealer, asking not to be named.

The spot rupee was hardly traded, but was quoted at 148.60/149.00.

Dealers said the currency has been under pressure on fears of U.S. President-elect Donald Trump’s economic policies leading to a rise in the dollar and trigger foreign fund outflows.

Foreign investors have net sold 38.93 billion rupees ($262.69 million) worth of government securities in the six weeks ended Nov. 23, ahead of an expected Fed rate hike in December.

Asian stocks tried to stabilise after a rocky November drew to a close, but Wednesday’s session brought new anxieties as Chinese equities and commodities tanked amid worries that Beijing’s efforts to support its currency could squeeze liquidity.

Sri Lankan shares were trading higher with the benchmark Colombo stock index up 0.18 percent at 6,243.01 as of 0655 GMT. Turnover stood at 246.4 million rupees ($1.66 million).

The market had shrugged off the central bank’s key monetary policy decision on Tuesday to keep rates unchanged.