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Sri Lankan rupee weaker on resumption of spot trading after six weeks
June 19, 2017 / 6:26 AM / 4 months ago

Sri Lankan rupee weaker on resumption of spot trading after six weeks

COLOMBO, June 19 (Reuters) - The Sri Lankan spot rupee weakened on Monday as dollar demand from importers weighed on the local currency when it resumed trading after six weeks, dealers said.

The spot rupee traded for the first time since May 5 and was at 153.05/10 at 0533 GMT. The central bank fixed the spot reference rate at 152.50 on May 5 and, in absence of active spot trade, the rupee forwards have been active.

“The spot rupee started trading today after a long time, I think the central bank decided to let it go,” said a currency dealer, requesting anonymity.

Another dealer confirmed the spot trade and no control from the central bank.

Central bank officials were not available for comment.

The central bank is not expected to intervene in the market, dealers said, due to the mid-year reserves target and the seasonal demand for the dollar expected from August.

The central bank has set a target of $1.2 billion in direct market purchases of dollars to boost the island nation’s reserves this year, mainly to achieve the reserves target set by the International Monetary Fund in return of a three-year $1.5 billion loan.

Foreign investors bought a net 7.93 billion rupees ($51.8 million) worth of government securities in the week ended June 14. They have sold a net 32.03 billion rupees worth of government bonds so far this year.

Sri Lankan shares were down 0.11 percent at 6,711.42, as of 0607 GMT. Turnover stood at 595 million rupees ($3.89 million). ($1 = 153.0500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)

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