Dealers say SL rupee dropped as foreign investors cut down on rupee bond buying

Dealers say SL rupee dropped as foreign investors cut down on rupee bond buying

Dealers say SL rupee dropped as foreign investors cut down on rupee bond buying

Written by Staff Writer

12 Jul, 2016 | 5:46 pm

According to dealers the Sri Lanka rupee had dropped, as foreign investors cut down on rupee bond buying in favour of a new higher-yielding sovereign debt.

Sri Lanka raised $1.5 billion in its first sale of dual-tranche eurobonds on Monday, July 11 although at a lower borrowing cost than initially expected, as yield-hungry global investors put in $6.6 billion in offers.

The Sri Lankan rupee one-week forwards, which have been acting as a proxy for the spot rupee, were at 146.45/50 per dollar at 0551 GMT, weaker than Monday’s close of 146.20/50.

The spot rupee is tightly managed by the Central Bank and market participants use the forward market levels for guidance on the currency.

Other dealers said the market was waiting to see if there could be any change in the currency level after the dollar bond inflows. Dealers said the Central Bank did not intervene in the foreign exchange market for the sixth straight session on Tuesday.

Last week, Central Bank governor Indrajit Coomaraswamy said the bank would manage the exchange rate flexibly avoiding too much volatility.

The spot rupee was not quoted, but the spot-next, which are rupee forwards settled three days after the spot rupee settlement were trading at 146.30/45 per dollar, weaker than Monday’s close of 146.10/30, dealers said.

The Sri Lankan stock index was up 0.57 percent at 6,408.49, on a turnover of Rs.201.7 million ($1.38 million).

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