Dec 19 (Reuters) – The Sri Lankan rupee closed weaker on Monday on importer dollar demand, as the market braced for declines in the local currency with the central bank raising the spot reference rate following a hike in U.S. interest rates, dealers said.
The U.S. Federal Reserve raised interest rate by 25 basis points on Wednesday and signalled a faster pace of increases in 2017 as central bankers adapted to the incoming Donald Trump administration’s promises of tax cuts, spending and deregulation.
Rupee forwards were active with spot-next forwards closing at 149.60/80 per dollar, compared with Friday’s close of 149.40/70.
"There was importer dollar demand today, while we did not see usual year-end exporter sales," said a currency dealer, asking not to be named.
On Thursday, the central bank increased the spot reference rate by 30 cents to 149.10, a day after raising it by 10 cents.
The spot rupee was hardly traded on Monday.