Sri Lankan rupee down on importer dollar demand

Jan 23, 2017 (Reuters) – The Sri Lankan rupee fell on Monday as the importer dollar demand surpassed modest greenback sales by exporters, dealers said.

Rupee forwards were active, with two-week forwards trading at 150.90/151.10 per dollar at 0522 GMT, compared with Friday’s close of 150.85/00.

The dollar, however, traded weaker against major currencies on Monday after U.S. President Donald Trump struck a protectionist tone in his inauguration speech, offsetting optimism that he will follow through on promises of tax cuts and other stimulus.

The spot rupee was quoted around the central bank’s reference level of 150.15, dealers said.

“There is continued pressure (on the rupee) due to (dollar) demand from importers of commodities and petroleum,” a currency dealer said asking not to be named.

Dealers also said exports could be hurt as severe drought hit the production of tea and other commodities.

The rupee has been under pressure due to rising imports and net selling of government securities by foreign investors, and a central bank decision to adjust the spot rupee reference rate to a record low of 150.15 rupees to the dollar.

Officials from the central bank were not immediately available for comment.

Sri Lanka’s central bank sold $458 million worth development bonds on Thursday, and investors say they expect that to ease some pressure on the rupee.

Foreign investors have net sold 19.8 billion rupees ($132.00 million) worth government securities in the two week to Jan. 18, according to the latest central bank data.

Sri Lankan shares traded 0.25 percent weaker at 6,154.17 as of 0530 GMT. Turnover stood at 252.1 million rupees ($1.68 million).

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