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Sri Lankan rupee steady, but importer dollar demand weighs
May 2, 2017 / 5:25 AM / 7 months ago

Sri Lankan rupee steady, but importer dollar demand weighs

COLOMBO, May 2 (Reuters) - The Sri Lankan rupee traded steady on Tuesday with the market expecting dollar inflows from a sovereign bond and syndicated loans, although importer demand for the greenback after a long weekend weighed on the currency, dealers said.

Sri Lanka expects to raise up to $1.5 billion via a sovereign bond issuance and another $1 billion from two separate syndicated loans.

Rupee forwards were active, with two-week forwards steady at 153.30/40 per dollar as of 0457 GMT, compared with Friday’s close. The markets were closed on Monday for the International Labour day.

“The (importer) demand is there today, maybe after the long weekend, but rupee is trading steady,” a currency dealer said, asking not to be named.

Dealers expect the rupee currency to stabilise on higher dollar liquidity after the expected inflows.

A government move to double the borrowing limit of development bonds to $3 billion in 2017 is also expected to increase liquidity.

Finance Minister Ravi Karunanayake on Thursday blamed “technical difficulties” for a two-month delay in receiving an around $160 million loan tranche from the IMF and said the disbursement was expected after June 14.

Sri Lanka has seen a rise in foreign inflows into equities and government securities since early this month, with foreign investors buying shares worth a net 13.7 billion rupees in 26 consecutive sessions through Friday.

Foreign investors have also net bought government securities worth 908.9 million rupees ($5.98 million) in the week ended April 26, extending the net inflow to 7.2 billon rupees in four consecutive weeks. But they have net sold 57 billion rupees worth of government bonds so far this year.

Sri Lankan shares were up 0.02 percent at 6,611.46 as of 0508 GMT. Turnover stood at 87.4 million rupees.

$1 = 151.9000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath

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