Categories: BusinessHeadlines

Sri Lanka rupee under pressure, hits record low last week

The Sri Lankan rupee hit a record low last week  as panicky importers bought U.S. dollars following the defeat of the ruling coalition parties in a local election, but late selling in the greenback by exporters capped the fall.

“Sri Lanka’s long term foreign exchange sources, such as exports and foreign direct investments, have drastically dropped during the last many years and also short term

exchange sources, such as sovereign bonds, stocks and other sources also declined due to political uncertainty, Professor of Economics University of Colombo Dr. Sirimal Abeyratne told The Island Financial Review.

“Due to political instability short term exchange sources or portfolio investments have reduced drastically, which tend to depreciate the rupee against the dollar, Abeyratne said.

The rupee, which traded at a record low of 155.90 during the day, ended at 155.40/50 per dollar, compared with last Monday’s close of 154.95/155.05 per dollar. It surpassed a previous closing low of 155 on Monday.

“Panic buying by importers and exporters’ hesitance to sell dollars in early trade resulted in the fall. But during the latter part of the day we saw some exporters selling, said a currency dealer on Friday.

“Rupee will be under pressure to depreciate until we see a solution to the political uncertainty, he added.

The local currency has weakened 1.3 percent so far this year.

The currency is expected to be pressured by continued demand from importers for dollars – this has resulted in a shortage of dollars in the country, market sources said.

They expect a gradual depreciation in the rupee and higher volatility this year on account of debt repayments by the government.

The domestic currency lost 2.5 percent last year and 3.9 percent in 2016.

AddThis Website Tools
Lankanewspapers

Recent Posts

LNP – AliExpress halts low-cost shipping to Sri Lanka amid tax reforms

AliExpress has officially suspended several of its budget shipping options to Sri Lanka and Pakistan…

2 hours ago

LNP – 124 unauthorised structures in Sigiriya to be removed: Minister

Buddhasasana, Religious and Cultural Affairs Minister Hiniduma Sunil Senevi revealed that 124 unauthorised structures have…

2 hours ago

LNP – Customs denies claims of new tax on online orders

Sri Lanka Customs has firmly rejected claims circulating on social media regarding the introduction of…

2 hours ago

LNP – Ex-Minister Mervyn Silva and 2 others granted bail

Former Minister Mervyn Silva and two others were granted bail today (03) by the Gampaha…

2 hours ago

LNP – Education Minister calls for urgent measures to end ragging and violence in universities

Education Minister Dr. Harini Amarasuriya has called for the formulation of comprehensive recommendations and measures…

8 hours ago

LNP – Human-Elephant Conflict claims over 250 lives in six months

The ongoing human-elephant conflict in Sri Lanka has claimed the lives of 261 individuals both…

8 hours ago