COLOMBO, Feb 12 (Reuters) - The Sri Lankan rupee ended steady for a fourth straight session on Thursday as the central bank prevented any fall amid importer dollar demand, though the market expects the downward pressure to persist until inflows come in, dealers said.
The spot currency ended steady at 132.80/133.00 per dollar. On Friday, the central bank lowered the spot rate to 132.80 from 132.20 amid depreciation pressure and since then the rupee has been maintained at 132.80.
Finance Minister Ravi Karunanayake said on Monday the rupee will be held steady at current levels and “there won’t be any devaluation at all”.
”Banks are plus in dollars, but they are not willing to sell them,“ a currency dealer said on condition of anonymity. ”Everybody expects the rupee to depreciate. So nobody, including exporters, are selling dollars. This trend will continue until the country gets huge inflows.
Karunanayake told Reuters on Monday that Sri Lanka would sell up to $1.5 billion sovereign bonds in the international market soon and expects maximum possible borrowing from the International Monetary Fund (IMF).
A central bank team led by its Governor Arjuna Mahendran is in Washington for talks with the IMF, government sources told Reuters.
One-month forwards traded at the administered rate of 133.44 per dollar, while most of the other forwards ceased trading for the fourth straight session after the central bank narrowed the per day premium to 2 cents on Monday from Friday’s 5 cents, dealers said.
Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee