October 4, 2016 / 8:01 AM / a year ago

Sri Lankan rupee edges down on importer dollar demand

COLOMBO, Oct 4 (Reuters) - The Sri Lankan rupee traded weaker on Tuesday as importer demand for the dollar outpaced exporter sales of the U.S. currency, dealers said.

The spot rupee was at 146.70/80 per dollar at 0739 GMT, compared with Monday’s close of 146.55/65.

The rupee has been under downward pressure due to seasonal importer dollar demand, posting a 0.65 percent decline last week.

“We do not see any direction from the central bank regarding the spot rupee level,” a currency dealer said.

Finance Ministry Ravi Karunanayake said on Monday the government wanted a strong currency through higher foreign inflows and without interventions.

“We are trying to get into an equilibrium between the interest rates and exchange rate,” he told a Foreign Correspondents Association (FCA) forum.

He also said the government was planning to impose heavy penalties on tax defaulters and expand tax offices across the country as it aims to increase the tax base..

The central bank has been under pressure from the International Monetary Fund (IMF) to continue rebuilding international reserves and maintain exchange rate flexibility to develop the foreign exchange market further.

Sri Lankan shares gained with the benchmark Colombo stock index up 0.14 percent at 6,583.50 as of 0743 GMT. Turnover was at 456.1 million rupees ($3.11 million).

$1 = 146.5000 Sri Lankan rupees Reporting by Shihar Aneez; Editing by Amrutha Gayathri

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