Sri Lankan rupee steady as dollar sales offset importer demand

The spot rupee is usually managed by the central bank, and market participants use the forward market levels for guidance on the currency.

By: Reuters | Colombo | Published:September 7, 2016 12:58 pm
sri lankan rupee, sl rupee. sl rupee rate, lankan rupee, lankan rupee rate, sri lanka economy, sri lanka news, world business news, business news Dealers said seasonal importer demand would pick up from mid-October. (Source: Reuters)

The Sri Lankan rupee traded steady on Wednesday as dollar sales by exporters and banks to convert inward remittances offset the demand from importers for the greenback, dealers said.

The spot rupee was flat at 145.43/45 per dollar at 0535 GMT, compared with Tuesday’s close of 145.43/48. One-week rupee forwards were at 145.68/73, compared with the previous close of 145.60/70.

The spot rupee is usually managed by the central bank, and market participants use the forward market levels for guidance on the currency.

“Today we haven’t seen dollar sales by foreign investors to buy government securities,” a currency dealer said, asking not to be named.

“Exporter conversions and inward remittances are matching mild importer demand,” the dealer said.

Dealers said seasonal importer demand would pick up from mid-October.

Central bank Governor Indrajith Coomaraswamy said last week that the currency was not under upward pressure as capital inflows had not been of sufficient magnitude to exert such pressure.

The central bank has largely not intervened to defend the rupee ever since a dual-tenure sovereign bond issue raised $1.5 billion in July.

Sri Lankan shares were also nearly flat, with the benchmark Colombo stock index up 0.03 percent to 6,526.67 as of 0541 GMT. Turnover was at 127.8 million rupees ($878,954.61).