The Sri Lankan rupee ended marginally weaker on Monday on dollar demand for oil and vehicle imports, but the local currency is expected to bounce back on inflows from inward remittances ahead of the traditional festival this week, dealers said. The rupee, which traded at 155.30 per dollar earlier in the session, closed 0.1 percent weaker at 155.50/60 per dollar, compared with Friday's close of 155.35/45.
"There was importer dollar demand, mainly for oil and vehicles. A state bank was on the buying side," said a currency dealer. "From tomorrow onwards, we don't see much importer demand and the rupee could regain and trade between 155.20/75 range." Another dealer said inward remittances ahead of Saturday's traditional Sinhala and Tamil New Year could help boost the currency.
The central bank governor on Wednesday said if inflation rate can be maintained between 4-5 percent, the depreciation in the rupee would be around 2-3 percent. The central bank said that it had so far during the year purchased over $400 million from the domestic foreign exchange market to build up international reserves. Sentiment has improved after Prime Minister Ranil Wickremesinghe survived a no-confidence motion last week.
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