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Sri Lankan rupee steady; late importer dlr demand offsets exporter sales
April 4, 2017 / 11:26 AM / 8 months ago

Sri Lankan rupee steady; late importer dlr demand offsets exporter sales

COLOMBO, April 4 (Reuters) - The Sri Lankan rupee ended steady in dull trade on Tuesday as late importer dollar demand erased the early gains from inward remittances and exporter greenback sales ahead of the festival season, dealers said.

Rupee forwards were active, with two-week forwards ending steady at 152.40/50 per dollar.

“There was some importer demand latter part of the day. Dollar conversions are happening as these are the last few days to pay bonuses and salaries before the new year. So, exporters are converting. We can see some inward remittances too,” said a currency dealer who did not wish to be named.

The rupee has been under pressure due to dollar demand to meet increased seasonal imports ahead of the traditional new year that is celebrated on April 13-14, dealers said.

The central bank raised the spot rupee reference rate by 10 cents to 151.70 on March 27. It had raised the reference rate by 25 cents on March 20.

The central bank raised interest rates for the first time in eight months on March 24, saying tighter policy was a precaution against a build-up of inflationary pressures.

Analysts said the rate hike, a move that was also aimed at easing pressure on the rupee, could help stabilise the domestic currency that has been hurt by rising imports and outflows due to rupee bond sales by foreign investors.

Foreign investors net sold government securities worth 950 million rupees ($6.26 million) in the week ended March 29. They have net sold 64.2 billion rupees of such instruments so far this year. ($1 = 151.7000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

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