ECONOMYNEXT – Sri Lanka’s rupee opened 140.45-60 to the US dollar in the spot forex markets Monday and weakened towards 140.75/85 in late morning trade.
The rupee closed at 140.55/65 levels Friday.
Sri Lanka’s rupee had been under pressure from rising domestic credit accommodated by liquidity releases and monetization by the Central Bank as state borrowings ratcheted up.
Spooked foreign investors also added to the pressure after a rate cut in April.
In interbank markets, money was quoted at 6.35/40 percent and gilt backed repos at 6.40/45 percent levels.
Last Wednesday the Central Bank bought Treasury bills at auction defending a three-month rate and engaging in 12-month quantity easing, below the ceiling of its policy rate corridor of 7.5 percent.
Sri Lanka has so far monetized 171 billion rupees of short term debt. (Colombo/Sept21/2015)