(Corrects Friday closing figures for two-week forwards in
COLOMBO, March 13 The Sri Lankan rupee eased
slightly on Monday due to importer dollar demand, with the
market awaiting inflows from sovereign and development bonds to
see if the local currency would reverse its falling trend,
Rupee forwards were active, with two-week forwards
trading at 152.30/45 per dollar, compared with Friday's close of
"We see some importer demand because of the first day of the
week," a currency dealer said, asking not to be named.
"We have seen some volatility in the past as the central
bank did not intervene as it used to earlier."
Lack of central bank intervention in the market comes after
the country missed the end-December net internal reserves target
set by the International Monetary Fund for a $1.5 billion loan
approved last year.
The IMF on Wednesday urged the central bank to rebuild
foreign reserves while maintaining exchange rate flexibility.
Dealers said the market is awaiting dollar inflows from a
$1.5 billion sovereign bond and a Sri Lanka Development Bond
auction scheduled for Tuesday in which the government expects to
raise $830 million.
Dealers expect the rupee to depreciate between 6 percent and
8 percent this year.
S&P Global Ratings said last week that it considers exchange
rate stability to remain a major priority for Sri Lanka's
policymakers and its central bank, limiting monetary
The central bank is struggling to maintain a flexible
exchange rate in the face of heavy foreign outflows from
government securities. The rupee has depreciated 1.1 percent so
far this year, having lost 3.9 percent of its value against the
dollar last year.
Foreign investors bought a net 1.87 billion rupees ($12.4
million) worth of government securities in the week ended March
8, recording the second weekly net inflow for the year. They
have sold a net 61.89 billion rupees of such instruments so far
Sri Lankan shares were down 0.3 percent at 6,066.80,
as of 0603 GMT. Stockbrokers attributed the fall to speculation
of a rate hike after the IMF last week urged the central bank to
stand ready to tighten interest rates.
Turnover stood at 62.8 million rupees ($415,207).
($1 = 151.2500 Sri Lankan rupees)
(Reporting by Shihar Aneez; Editing by Sunil Nair)