The Sri Lankan rupee traded weaker on Thursday in thin trade due to light importer dollar demand, while dealers expected the currency to remain stable until imports pick up sharply with remittances slowing down.
The spot rupee was traded at 130.63/66 per dollar at 0617 GMT, a tad weaker from Wednesday's close of 130.60/61.
"We see importer dollar demand coming in with inflows drying," said a currency dealer, adding that the market was waiting to see if the central bank would defend the rupee or allow flexible movement in the exchange rate.
The benchmark 91-day treasury bill yield dropped to its lowest since January 2007, data showed on Wednesday, a day after the central bank kept policy rates steady at multi-year lows. ,
Many dealers said they are surprised by the lower credit demand from the private sector even though key interest rates have been at multi-year lows since January.
Private sector credit grew 4.4 percent year-on-year in February, the slowest since May 2010, latest data from the central bank showed. That compared with a growth of 5.2 percent in January this year and 13.3 percent in February 2013.
The central bank, in its monetary policy statement on Tuesday, expressed confidence that private sector credit growth would rebound in the second quarter and push up the pace of economic expansion.
Dealers expect the rupee to trade in a range of 130.60-70 in the near future. It has been hovering between 130.55 and 130.70 per dollar since March 3, Thomson Reuters data showed, with the central bank intervening to smoothen any sharp volatility.
There was a gradual increase since mid-March in remittances by Sri Lankan expatriates to their relatives, while dollar selling also increased as exporters paid bonuses to their employees until end of the festival season last week.
Those inflows have helped ease the depreciation pressure seen in the early part of the year.
Sri Lanka's main stock index was down 0.1 percent, or 5.87 points, at 6,166.90 as of 0624 GMT, with the market turnover at 780.8 million rupees ($5.98 million), with 21.4 million shares traded. ($1 = 130.6250 Sri Lanka Rupees).
Source;- in.reuters.com
No comments:
Post a Comment