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இலங்கை ரூபாயின் பெறுமதி பாரிய வீழ்ச்சி.

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S.Lanka rupee heads for life low, may slide further

COLOMBO, Oct 12 (Reuters) - Sri Lanka's rupee is approaching all-time lows against the dollar as the government is forced to raise funds to meet costly dollar fuel import bills, and analysts expect the local currency to keep sliding.

The rupee was quoted around 105.36/105.42 at the Thursday mid-session, after closing at 105.12/105.17 on Wednesday, putting the currency a hair's breadth away from the all-time closing low of 105.40 hit on Dec. 16, 2004, just prior to Asia's tsunami.

After Sri Lanka's worst natural disaster in memory, pledges of hundreds of millions of aid dollars helped boost the local currency to 97.8 rupees by Jan. 12, 2005 as the aid was factored into the market, but the rupee has slid gradually ever since.

"Given an extended period of high inflation and monetary expansion, it was to be expected," said Dushyanth Wijayasinghe, head of research at Asia Securities. "The rupee is only catching up with the broader macroeconomic fundamentals."

"There is the impact of the high oil bill, the trade deficit and loose government stance on fiscal policy," he said.

Wijayasinghe expects the rupee to hit around 107 per dollar by the year-end. The currency has fallen about 3 percent since the start of the year. ADVERTISEMENT

Sri Lanka produces no oil and has been hit hard by soaring global crude prices, which have widened the trade deficit and spurred inflation in the $23 billion economy.

The island's trade deficit widened to $2.4 billion in the first eight months of 2006 from $1.575 billion during the same period last year, as government spending on intermediate goods such as oil rose.

The central bank also triggered a cash crunch by briefly closing its reverse repurchase agreement window in September, sending interbank lending rates to as much as 18 percent, before raising its policy interest rates for the third time this year shortly afterwards.

Analysts said that had injected fresh uncertainty into the banking system, with banks forced to raise their deposit rates sharply to maintain liquidity.

While the Colombo stock market is approaching life highs amid hopes the government and Tamil Tigers will renew peace talks to end a new chapter of civil war, currency traders say the rupee will likely weaken further as seasonal imports increase demand for dollars.

"The importers are placing orders for Christmas from the second week of October to the last week of November so this will have an impact on rupee," said one currency trader, asking not to be named.

The rupee's gradual depreciation, coupled with inflation which rose to 11.2 percent in September from 10.8 percent in August as measured on a 12-month moving average, is hurting consumers.

"Prices have gone up for all products with the rupee's depreciation and it is very difficult now for everyone," said 48-year-old Weerabahu Chandrakumar, who manages a fast food outlet in Colombo.

"Rice has gone up in price, but if we increase our prices customers won't come."

http://asia.news.yahoo.com/061012/3/2r88x.html

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