Sri Lanka rupee falls as state bank raises dollar peg

The rupee depreciated 15 paise to 65.15 against the US dollar in early trade on Monday at the Interbank Foreign Exchange due to appreciation of the American currency overseas. “The rupee’s close below 65.30 level against the dollar is little worrisome at the moment and we expect the RBI to intervene if the local currency weakens further from the current levels”, said Hariprasad M.P. head of treasury at Centrum Direct.

“Demand has been mostly from foreign banks”.

Veracity Group CEO Pramit Brahmbhatt said, “Rupee traded weak taking cues from a stronger dollar”. Further, trade data which was released on Friday after the market closed hit the sentiment.

It moved in a range of 65.26 and 65.12 per dollar during the morning deals before quoting at 65.21 at 1030 hrs.

Meanwhile, the benchmark BSE Sensex plunged 328.18 factors, or 1.sixteen per cent to 27,739.13 in early commerce immediately.

The currency has fallen 0.37 percent since August 5 as the state-owned bank raised the currency’s peg against the dollar by 50 cents on four occasions, allowing the exchange rate to fall.

Since the beginning of this year, the rupee has lost 3.4%, while foreign institutional investors have bought $6.92 billion from local equity and $6.29 billion from bond markets.