Sri Lanka rupee falls to 148.80/149.00 to the US dollar
Mar 29, 2016 12:32 PM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - Sri Lanka rupee fell to 148.80/149.00 to the US dollar in the one week forward market Tuesday which is the only market rate available dealers said, as loose monetary policy took its toll.
On Monday one week forwards closed around 148.20/30 to the US dollar.
The dollar spot market rate is 'officially' at 143.90 to the US dollar with foreign investors selling out of rupee bonds after credibility in Sri Lanka's dollar peg was undermined by rate cuts and money printing by the Central Bank.
No trading takes place at the official spot rate.
A monetary policy announcement is due later today where a rate hike is expected.
On Monday banks borrowed 19.1 billion rupees of printed money through the 8.0 percent overnight reverse repo window.
However analysts say this is an improvement on the policy for most of last year where the central bank printed money to repay Treasury bills after rejecting real bids at auctions to push credit and imports to unsustainable levels.
The rupee has fallen from 131 to the US dollar in January to current levels as rates were cut and money printed despite domestic credit picking up and budgets deteriorating. (Colombo/Mar29/2016)