Sri Lankan rupee falls on importer dollar demand

american-doller

COLOMBO, Oct 18 (Reuters) – The Sri Lankan rupee fell on Tuesday on importer dollar demand in the absence of central bank intervention, said dealers.

Rupee forwards were active, with the spot-next at 147.20/30 per dollar as of 0752 GMT, compared with its previous close of 147.00/05.

The spot rupee was quoted at 146.90/95 per dollar, but hardly traded. It was steady last week after two weeks of losses.

The spot rupee is usually managed by the central bank, and market participants use the forward market levels for guidance on the currency.

“There was importer (dollar) demand and traders were reluctant to trade spot below 146.90 because the central bank (last week) prevented its trading below this level. But the central bank was not seen today,” said a currency dealer, asking not to be named.

The central bank has been buying dollars from the market to accumulate reserves to meet targets set by the International Monetary Fund under a $1.5-billion loan deal, dealers said.

Officials at the central bank were not available for comments.

Dealers said they expected the rupee to remain under pressure due to seasonal imports.

Sri Lankan shares were lower, heading for a seventh straight fall, with the benchmark Colombo stock index down 0.06 percent at 6,448.60 as of 0757 GMT. Turnover stood at 255.9 million rupees ($1.75 million).