Rupee takes a hammering, buoyed by CB

* President’s speech has no impact


Strong demand for dollars put pressure on the rupee to depreciate yesterday, but Central Bank invention prevented the exchange rate from going beyond the upper limit of the trading band.

"There was severe demand for dollars mainly to settle import bills and the dollar ended the day at Rs. 110 with state-names intervening to keep a check on the exchange rate," a dealer said.

Dealers said the demand was so considerable that both buyers and sellers were quoting dollars at Rs. 110,the upper limit imposed by the Central Bank.

Meanwhile, dealers said the financial market was oblivious to President Rajapaksa’s announcement that the emergency regulations would be lifted.

"Investors only care about the yield curves, exchange rates and political stability and lifting emergency regulations will not have an immediate impact, although one could say it is a part and parcel of political stability. Of course in the long run, there would be some boost for FDI inflows and this would be manifest perhaps a year or two from now," a dealer said.

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