Sri Lanka rupee in new low

Mar 19, 2012 (LBO) – Sri Lanka’s rupee hit a new low of around 127.00 rupees against the US dollar in the spot market Monday with some selling by a state bank seen, dealers said. The rupee opened at 125.50/70 levels and moved as low as 127.00 rupees when sales by a state bank was seen, dealers said.

The currency was later quote around 126.20/50 dealers said.

Sri Lanka’s rupee had come under pressure from high credit growth and rupee injections by the Central Bank to sterilize interventions.

Analysts have warned that a practice where large dollar inflows are converted by the Central Bank off-market and rupees injected to the banking system puts further pressure on the dollar peg. .