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CORRECTED-Sri Lankan rupee edges down on importer dlr demand; stx up
May 8, 2017 / 6:46 AM / 2 months ago

CORRECTED-Sri Lankan rupee edges down on importer dlr demand; stx up

2 Min Read

(Corrects market holidays in paragraph 5)

COLOMBO, May 8 (Reuters) - The Sri Lankan rupee forwards traded slightly weaker on Monday due to mild dollar demand from importers, but anticipated dollar inflows from sovereign bonds and syndicated loans prevented steeper losses in the local currency, dealers said.

Rupee forwards were active, with two-week forwards trading at 153.20/40 per dollar at 0625 GMT, compared with Friday's close of 153.00/20.

The spot rupee, which started trading on Friday after four months, was not active, with the central bank's reference rate at 152.10.

"There is some importer (dollar) demand, maybe due to the holidays. But most of the investors are on the sidelines and awaiting inflows," a currency dealer said.

Sri Lankan markets will be closed on Wednesday and Thursday to mark a Buddhist religious holiday.

Sri Lanka drew a blowout response in its return to the international bond market, attracting orders of more than $11 billion from 500 accounts for a $1.5 billion 10-year bond.

Currency dealers expect higher dollar liquidity from the inflows to help stabilise the rupee.

The country expects another $1 billion from two separate syndicated loans.

The central bank has allowed the currency to gradually depreciate since mid-December, revising its spot reference rate multiple times. It has said that defending the currency with foreign exchange reserves did not "seem sensible".

The island nation has seen inflows into equities and government securities since early April.

Sri Lankan shares were up 0.4 percent at 6,665.53, as of 0627 GMT, its highest since May 19. Turnover stood at 482.1 million rupees ($3.17 million). ($1 = 152.2000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

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