Sri Lankan rupee trades firmer on dollar selling by banks

COLOMBO, Nov 9 (Reuters) – The Sri Lankan rupee was trading firmer on Wednesday as dollar selling by banks outpaced demand for the greenback from importers as the U.S. currency fell, dealers said.

The U.S. dollar sank and stocks plummeted as mayhem came to world markets on Wednesday as investors faced the possibility of a shock win by Republican Donald Trump that could upend the global political order.

Rupee forwards were active, with one-week forwards trading at 148.05/20 per dollar 0453 GMT, compared with Tuesday’s close of 148.10/15.

“There is some bank (dollar) selling in the market in dull trade,” a currency dealer said, asking not to be named.

“U.S. election gives uncertainty to the market. Most of the investors are waiting to see the outcome.”

Dealers said the pressure on the rupee will ease with the announcement of the national budget scheduled on Thursday and a pickup in year-end remittances.

Deputy Central Bank Governor Nandalal Weerasinghe said on Tuesday that the usual seasonal demand in November, ahead of the budget, has resulted in pressure on the rupee.

“With the remittances coming in, the trend will get reversed in December,” he told Reuters.

Selling of government securities by foreign investors has also hit the rupee, dealers said.

Foreign investors net sold 24.5 billion rupees ($165.6 million) worth of government securities in the three weeks ended Nov. 2, data from the central bank showed.

Sri Lankan shares were marginally lower, with the benchmark Colombo stock index down 0.03 percent at 6,437.17 as of 0459 GMT. Turnover stood at 173.2 million rupees ($1.17 million). ($1 = 147.7000 Sri Lankan rupees)