Sri Lanka rupee slips on importer dollar demand

COLOMBO: The Sri Lankan rupee ended slightly weaker as importer dollar demand offset greenback sales by banks and exporters, but depreciation pressure on the currency remained in the absence of firm dollar inflows, dealers said.
Some dealers said they have moved to one-day forward instead of spot trade after the central bank’s earlier direction to banks not to accept bids above 131.60 rupees per dollar.
The one-day forward ended weaker at 131.66/72 per dollar from Monday’s close of 131.64/66.
The rupee has fallen around 4 percent between June 7 and July 18, after foreign investors started pulling out of Sri Lanka’s treasury bonds due to a rise in US treasury yields.
The currency has been steady around 131.60 since July 18 as the central bank has not been allowing the spot dollar to be traded beyond 131.60 amid a rise in foreign holding in government securities, dealers said.
Dealers expect the rupee to move in a 131.50 to 132.00 range in the short term and continue to depreciate unless the central bank steps in or dollar inflows increase significantly.