COLOMBO Oct 10 The Sri Lankan rupee fell on
Monday due to seasonal importer dollar demand ahead of the
festive season in December, dealers said.
The local currency would be under downward pressure due to
continued importer demand until the end of the year, they added.
The spot rupee was quoted at 146.85 per dollar at
0713 GMT, but there was hardly any trade for a second day,
dealers said. It closed at 146.88/95 on Thursday.
Rupee forwards were active, and the spot-next was at
147.05/10, compared with the previous day's close of
146.95/147.05, dealers said.
"Seasonal importer demand is there. The spot did not trade
because dealers are scared of the central bank's retribution
after the moral suasion," a currency dealer said, asking not to
The market expects the local currency to be under pressure
due to seasonal demand from importers until the year-end.
Dealers said foreign buying into government securities has
slowed with the fall in interest rates while the central bank
has been buying dollars from the market to accumulate reserves
to meet the targets set by the International Monetary Fund under
a $1.5 billion loan deal.
Officials at the central bank were not available for
The central bank has been under pressure from the (IMF) to
continue rebuilding international reserves and maintain exchange
rate flexibility to develop the foreign exchange market further.
The central bank usually intervenes to curb volatility in
The rupee has been under pressure due to importer dollar
demand, posting a 0.4 percent decline last week, following a
0.65 percent in fall in the preceding week.
The government wanted a strong currency through higher
foreign inflows and without interventions, Finance Minister Ravi
Karunanayake said last week.
Sri Lankan shares were steady with the benchmark Colombo
stock index 0.01 percent higher at 6,582.74 as of 0727
GMT. Turnover was at 259.2 million rupees ($1.77 million).
($1 = 146.3700 Sri Lankan rupees)
(Reporting by Shihar Aneez; Editing by Sunil Nair)