Sri Lankan rupee falls on importer dollar demand, dollar strength
COLOMBO, Sept 10 (Reuters) - The Sri Lankan rupee
ended weaker on Monday as importer dollar demand surpassed
greenback sales by banks and the U.S. currency strengthened
globally, dealers said.
The dollar traded higher against a basket of currencies amid
fears of a potentially major escalation in the China-U.S. trade
The rupee hit a fresh low of 162.65 per dollar on Thursday,
hurt by strong demand for the dollar from importers amid
weakness in regional currencies, before the central bank cut the
net open positions (NOP) of commercial banks, forcing banks to
Nandalal Weerasinghe, Senior Deputy Governor at the central
bank, said on Friday the monetary authority had observed
commercial banks were building up their positions without any
fundamental reasons, which led to the cut in NOP.
The local currency, which hit a low of 162.42 in intraday
trade on Friday, ended at 162.35/45 per dollar, compared with
Friday's close of 161.90/162.10.
Junior finance minister Eran Wickremaratne last week told
Reuters that the government would leave the rupee for market
forces to decide.
The currency has weakened 0.56 percent so far this month
after a 1.2 percent drop last month, and has declined 5.8
percent so far this year. It will be under depreciation pressure
due to year-end seasonal importer dollar demand, dealers added.
The rupee is also hurt by weakness in the Indian rupee
. India is Sri Lanka's biggest trading partner and the
Indian rupee, which also hit a record low on Monday, has been
one of the worst performers in Asia this year.
Foreign investors sold government securities worth a net
6.44 billion rupees ($39.68 million) in the week ended Sept. 5,
extending the net outflow so far this year to 53.3 billion
rupees worth of securities, central bank data showed.
($1 = 162.3000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by
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