Sri Lanka’s rupee commenced trading at 309.25/70 against the US dollar in the spot market on Thursday, marking an improvement from the previous day’s rate of 309.50/60. This strengthening, observed by dealers, occurred amidst significant moral suasion. Initially, the rupee traded at a weaker position of approximately 310.30 against the US dollar before gaining strength.
Over the past year, the rupee has depreciated from 293.25/75 to its current level despite record current account surpluses and improvements in the national budget, challenging the typical explanations offered by macro-economists for currency depreciation.
The telegraphic transfer rates for the US dollar were set at 306.0000 for buying and 313.0000 for selling. Meanwhile, the British pound was priced at 411.3046 for buying and 422.6664 for selling, with the euro at 357.1960 for buying and 368.5592 for selling.
Trading activity in the secondary bond market remained subdued, according to dealers. A bond set to mature on May 1, 2028, was quoted at yields of 9.15/20 percent.
In recent weeks, bill and bond yields have experienced an upward movement. The government has announced plans for extensive relief payments, which are to be financed through a so-called domestic buffer.
(Colombo/Jan1/2025)
