COLOMBO, Oct 20 (Reuters) - Sri Lankan rupee forwards weakened on Monday due to importer dollar demand, while the spot rupee was untraded, with dealers saying the central bank prevented banks through moral suasion from trading the cash currency above 130.70.
Three-day forwards, actively traded in the absence of spot, were at 130.80/90 per dollar at 0635 GMT compared with Friday's close of 130.80/85.
The spot currency was neither traded nor quoted. It ended at 130.60/80 on Friday.
"Importer (dollar) demand is there, but the spot is not quoted as moral suasion is seen," said a currency dealer asking not to be named.
Dealers said the market was waiting for cues from the 2015 budget, to be presented on Oct. 24.
The central bank held the key policy rates steady as expected before the market opened on Friday, a day after its head said a reversal of the falling trend in t-bill yield was a signal of where the authorities want rates to be.
The central bank, at its policy rate announcement on Friday, said short-term money market rates have broadly stabilised, while long-term lending rates are adjusting downwards after some initial volatility in the domestic money market in response to the monetary policy measures taken in September.
The rupee has been under pressure since the central bank announced steps to boost credit to the private sector in its September monetary policy review.
Central Bank Governor Ajith Nivard Cabraal said last week there would be a greater tendency for the rupee to appreciate gently in light of the improvements in the external account.
The central bank in the last week of September limited the spot range to between 130.40 and 130.50 to prevent any sharp falls amid heavy selling in stocks and a pullback by foreign investors from government securities.
Overseas investors sold a net 29.4 billion rupees ($225.3 million) worth of government securities in the four weeks through Oct. 15, data from the central bank showed.
Sri Lanka's stock index recovered from an early fall and was up 0.02 percent at 7,235.91 as of 0646 GMT.
Turnover was 463.6 million rupees, with 21.7 million shares changing hands. (1 US dollar = 130.6000 Sri Lankan rupee) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Prateek Chatterjee)