COLOMBO: The Sri Lankan rupee traded weaker on Tuesday as importer dollar demand and dividend payments outpaced mild inward remittances, dealers said. Rupee forwards were active, with two-week forwards trading at 153.20/40 per dollar at 0516 GMT, compared with Friday’s close of 153.00/10. The markets were closed for a Buddhist religious holiday on Monday. “Demand for the dollar is there today from a foreign bank and sizable demand is piling up either for repatriation of profits or dividend,” said a currency dealer who did not wish to be named. “There is not much of (dollar) supply as most of the companies are closed for the New Year.”
Sri Lanka will celebrate its traditional new year this week and the markets will be closed on Thursday and Friday. The rupee has been under pressure due to increased seasonal imports ahead of the traditional new year later next week, although dealers expect the pressure to ease with seasonal inward remittances. Outflows due to rupee bond sales by foreign investors have also been putting pressure on the currency. Foreign investors net bought government securities worth 259.5 million rupees ($1.71 million) in the week ended April 5. However, they are net sellers worth 63.9 billion rupees of such instruments so far this year. Sri Lankan shares were up 0.03 percent at 6,294.76 as of 0529 GMT. Turnover stood at 40.02 million Sri Lankan rupees ($263,984.17).
