Poll Jitters

The rupee ended a tad lower against the US dollar on election day, though there were concerns that the currency could face a volatile period, on the outcome of what is expected to be a hung parliament.
Trading hours for currency and money markets were shortened for four-hours due to the election.rn

rnThe dollar opened at Rs. 97.79, a tad down from Thursdays close of Rs. 97.75. But the greenback closed higher at Rs. 97.80 on thin volumes.rn

rnDealers believe that the Central Bank may have indirectly intervened in the market this morning, by persuading a state bank to sell some of its dollars at around Rs. 97.78 to check volatility. In the run-up to the polls, state-run Bank of Ceylon has been selling dollars to put a lid on pre-election jitters.rn

rnBut the intervention did little to stop the rupee from sliding.rn

rn”Until we see a clear outcome from todays election the rupee will continue to be under pressure,” says Dudeepa Ratwatte, Chief Dealer attached to Hatton National Bank.rn

rnElsewhere, the liquidity surplus is expected to keep the call rate steady at 7.5 percent in the money market, dealers said.rn


-LBO Newsdesk: LBOEmail@vanguardlanka.comrn