Rupee slips to new low, touches Rs158 to the US dollar
ECONOMYNEXT – The Sri Lanka rupee was quoted at a new low of 157.85/158.00 rupees against the US dollar in early trading in the spot market Thursday, with moral suasion by the Central Bank and dollar selling by state banks holding the exchange rate steady, dealers said.
State names which usually acts for the the monetary authority, were seen selling dollars at 157.85 levels to to small banks, dealers said.
The rupee came under pressure after the central bank cut rates and injected tens of billions of rupees into the banking sytsem to enforce a rate cut.
The combination of crude oil bills and exporters holding back dollar conversions was putting pressure on the rupee, dealers said.
Oil bills pressures the rupee only if the petroleum companies run losses, which are funded by bank credit, which in turn are re-financed through the central bank’s reverse repurchas cash injections or outright Treaury bill purchases.
The central bank has mopped up a lot of the cash injected for the festival season.
The US dollar closed at 157.75/90 rupees the previous day.
Gilt yields edged up in early trading in the secondary bond market.
A five year bond maturing in 2023 was trading at 10.20/30 percent in two-way quotes, up from the previous day’s 10.18/25 percent close.
A ten-year bond maturing in 2028 was trading at 10.45/55 percent, unchanged from the previous day.
Sri Lanka stocks opened flat Thursday.
The All Share index gained 0.07 percent in early trading, up 5.06 points to 6,523.70, and the S&P SL20 of more liquid stocks gained 0.10 percent, up 3.48 points to 3,636.27.
Market turnover was 51.7 million rupees.
Union Bank was trading 20 cents higher at 13.60 rupees and Sampath Bank was 30 cents lower at 297.50 rupees.
Kelani Tyres was down 2.90 rupees to 43.10 rupees and Serendib Engineering was up 10 cents to 9.60 rupees. (COLOMBO, 03 May, 2018)