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Sri Lankan rupee firmer on exporter dollar sales; stocks up
March 29, 2017 / 5:54 AM / 8 months ago

Sri Lankan rupee firmer on exporter dollar sales; stocks up

COLOMBO, March 29 (Reuters) - The Sri Lankan rupee edged up on Wednesday due to exporter dollar sales, but importer demand for the U.S. currency from a state bank weighed on sentiment, dealers said.

Rupee forwards were active, with two-week forwards trading at 152.65/80 per dollar at 0515 GMT, compared with Tuesday’s close of 152.70/80.

“Today the rupee is trading slightly firmer due to the lack of large importer demand. Other than the state bank’s demand for dollar, we have not seen large bills in the market,” said a currency dealer, requesting anonymity.

The rupee is under pressure due to dollar demand to meet increased seasonal imports and payments by oil importers, dealers said.

The central bank on Monday raised the spot rupee reference rate by 10 cents to 151.70 after the bank raised the it by 25 cents on March 20.

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

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

Foreign investors net bought government securities worth 70 million rupees ($461,285) in the week ended March 22. They have net sold 63.2 billion rupees of such instruments so far this year.

Sri Lankan shares were up 0.8 percent at 6,033.1 as of 0541 GMT. Turnover stood at 114.7 million Sri Lankan rupees ($756,097.56). ($1 = 151.7000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips)

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