COLOMBO: The Sri Lankan rupee ended weaker on Thursday for a second day due to dollar demand from importers as the market braced for further declines in the local currency in the absence of intervention from the country’s central bank, dealers said.
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.
Rupee forwards were active, with two-week forwards ending at 151.00/10 per dollar, weaker from Wednesday’s close of 150.75/80.
“It looks like depreciation is going to continue,” a currency dealer said asking not to be named. “We did not see any intervention from the central bank.”
The spot rupee was quoted around the central bank’s reference level of 150.15, dealers said. It is hovering at a record low level.
Officials from the central bank were not immediately available for comment.
Sri Lanka’s central bank sold $233 million worth development bonds on Thursday, and investors expect that would ease some pressure on the rupee. The rupee has also been under pressure due to selling of government bonds by foreign investors.
They have net sold 16.1 billion rupees ($107.3 million) worth government securities in the week to Jan. 11, according to the latest central bank data.
