Tamil Diplomat

Sri Lankan currency ends weaker

The Sri Lankan rupee ended a tad weaker on Wednesday to hover near its record low as importer dollar demand surpassed inward remittances, dealers said.
The rupee ended at 143.22/27 per dollar compared with Tuesday’s close of 143.20/25, and not far from an all-time low of 143.30 hit on Friday.
“The rupee ended weaker on importer (dollar) demand despite inward remittances,” said a currency dealer asking not to be named.
Dealers said the inward remittances for the festival season would ease the pressure on the local currency in the short term.
Sri Lanka is to seek an IMF stand-by arrangement to fend off a risk that its economy will be hurt next year by repercussions from events affecting major economies.
Global political risk research firm Eurasia group last week said political infighting and populist policies are likely to slow down implementation of the budget’s economic liberalization measures.
Sasha Riser-Kositsky of Eurasia in a research note said Sri Lanka’s 2016 budget highlights the government’s weak commitment to fiscal consolidation and will leave its external accounts position vulnerable.
The rupee has dropped around 8.4 percent so far this year and 5.9 percent since the central bank allowed free-float on Sept. 4, Thomson Reuters data showed.
The central bank sold dollars worth a net $277.95 million in October and $523.80 million in September, latest data showed. Dealers said part of that money was spent to defend the rupee.
Sri Lanka’s consumer prices in November rose to a 10-month high of 3.1 percent from a year earlier, the Department of Census and Statistics said on Monday.
Commercial banks parked 136.199 billion rupees ($951.44 million) of surplus liquidity on Wednesday, using the central bank’s deposit facility at 6 percent, official data showed. (Arab News)