COLOMBO: The Sri Lankan rupee fell in early trade on Thursday on importer dollar demand and fewer conversions of the U.S. currency by exporters, dealers said. The spot rupee was at 153.70/75 per dollar as of 0511 GMT, weaker from Wednesday’s close of 153.55/65. “Some demand is there, not only from state banks, but also from the local banks. That may be (due to) demand for month-end imports,” a currency dealer said, requesting anonymity. “There is not much (dollar) supply today. There are some bids, but with the rupee weakening, they are also being withdrawn expecting further fall.” Last week, central bank Governor Indrajith Coomaraswamy said the rupee was still “over-valued” and that the monetary authority was still buying dollars to avoid any appreciation.
The banking regulator is compelled to buy dollars from the market to meet a reserves target set by the International Monetary Fund (IMF) under a $1.5 billion, three-year loan programme. On Tuesday, Sri Lanka’s cabinet cleared a revised agreement to lease its Chinese-built southern port of Hambantota, after terms of the first pact sparked widespread public anger in the island nation. The investment on the deal is expected to be around $1 billion. Sri Lankan shares traded steady at 6,669.08 as of 0515 GMT. Turnover was 94 million rupees (about $612,378).
