The Sri Lankan rupee ended weaker on Monday, as demand for the US dollar by importers surpassed mild exporter selling of the greenback, dealers said. The rupee came under pressure early this month due to dollar demand from state-run Ceylon Petroleum Corp (CPC), which stocked up crude oil ahead of an expected fuel price hike, dealers said, adding they expected the currency to weaken on generally higher import demand ahead of the national budget.
The spot rupee closed at 153.75/80 per dollar, weaker from Friday's close of 153.60/70. "The demand was there; it was the general importer (dollar) demand," said a currency dealer, requesting anonymity. "We expect the rupee to weaken a bit and the exporters are holding on."The rupee currency has weakened 2.7 percent so far this year.
Crude prices are expected to rise after private fuel retailer Lanka IOC said it was likely to hike rates as it has been selling fuels at a loss, local media reported late last month. The rupee has been under pressure since January after the central bank stopped defending the currency and started buying the dollar to build the country's depleted foreign reserves. The island nation has seen 19.2 billion rupees ($125 million) of net inflows into equities this year as of Monday's close, and 38.2 billion rupees into government securities as of October 18, official data showed.
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