US$ hovers around Rs.200
View(s):The Sri Lanka rupee, which has been under pressure in the past few weeks, was hovering around the Rs.200 per 1$ level on Friday, money market traders said.
It was trading at Rs.199.75 from the import (buying) side while on the selling side it was trading at 198-199 rupees.
While it was unclear as to why the dollar was surging in the midst of import controls, some dealers said they believed this was due to letters of credit (LCs) coming to the market which had received a six month extension earlier at the request of the Central Bank to reduce pressure on the rupee.
Traders said that smaller banks which have exhausted their limits were coming into the market seeking dollars while the Central Bank was not intervening in the market or was not seen as intervening. The banking regulator would normally pump dollars in the market to stabilize the rupee and curb its fall.
Pressure on the rupee was also because exporters were seeking a higher rate for their dollar proceeds.