Sri Lankan rupee ends steady; Fed rate hike impact awaited
COLOMBO, Dec 17 (Reuters) – The Sri Lankan rupee ended steady in thin trade on Thursday, as the market waited for the impact of the U.S. Federal Reserve’s first rate hike in a decade, dealers said.
Light dollar conversions by exporters offset importer demand for the greenback. Dealers expect trading to be dull until December-end due to year-end holidays.
The rupee ended steady at 143.60/80. It hit a record low of 143.80 on Tuesday.
"The Fed rate hike was already factored in. But we are waiting to see the impact of Fed’s comments over the interest rate outlook in 2016," a currency dealer said asking not to be named.
The U.S. central bank’s policy-setting committee raised the range of its benchmark interest rate by a quarter of a percentage point to between 0.25 percent and 0.50 percent, ending a lengthy debate about whether the economy was strong enough to withstand higher borrowing costs.
Globally, the U.S. dollar rose 0.9 percent against a basket of major currencies, and looked set for another test of stiff resistance around the 100.00 mark.
The rupee has fallen 8.7 percent so far this year. It has declined 6.2 percent since the central bank floated the currency on Sept. 4.
The central bank sold dollars worth a net $1.1 billion in the three months to Nov. 30, latest data showed. Dealers said part of that money went into defending the rupee.
Commercial banks parked 46.1 billion rupees ($321.48 million) of surplus liquidity on Thursday using the central bank’s deposit facility at 6 percent, official data showed.