The Sri Lankan rupee fell on Wednesday on importer dollar demand and foreign bond sales, while expectations of higher seasonal imports and a pickup in motor vehicle buying after taxes were slashed in last week's budget also weighed on the market. The spot rupee, which touched a low of 153.83 per dollar in intraday trading, closed at 153.75/85 per dollar, compared with Tuesday's close of 153.63/65. "There were concerns on some budget policies and some were awaiting clarity," a currency dealer said requesting anonymity.
"The rupee will further depreciate because we see demand for imports of fuel, steel and also general imports. People could import more lower-end vehicles on which the government reduced taxes. We do not see a proper plan for shorter term dollar inflows." The government imposed new taxes on high-end motor vehicles, telecoms, banks and liquor in a bid to boost revenues, in its 2018 budget outlined last week, as the budget deficit for the current year slipped to 5.2 percent of GDP.
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