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Sri Lankan rupee steady; stocks up
May 4, 2017 / 7:29 AM / 7 months ago

Sri Lankan rupee steady; stocks up

COLOMBO, May 4 (Reuters) - The Sri Lankan rupee traded steady on Thursday as importer dollar demand was offset by exporter sales amid expectations of inflows from a sovereign bond issuance and syndicated loans, 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.

The Sri Lankan government has given initial yield guidance of 6.625 percent area for a 10-year U.S. dollar bond offering. Citigroup, Citic CLSA, Deutsche Bank, HSBC, ICBC International, JP Morgan and Standard Chartered are the joint bookrunners.

The move comes a day after the International Monetary Fund late on Wednesday said its executive board was likely to consider in June Sri Lanka’s request for the completion of a second loan review, a requirement for disbursing a third tranche of aid.

Rupee forwards were active, with two-week forwards steady at 153.30/25 per dollar.

“Every body is waiting for the sovereign bond and the SLDB (Sri Lanka Development Bond). It is the moral booster and the reserve booster,” a currency dealer said, asking not to be named.

Dealers expect the rupee to stabilise on higher dollar liquidity after the anticipated 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 had last week blamed “technical difficulties” for a two-month delay in receiving an around $160 million loan tranche from the International Monetary Fund and said the disbursement was expected after June 14.

Foreign investors 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 billion 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 0.55 percent at 6,599.80 as of 0719 GMT. Turnover stood at 422.7 million rupees ($2.78 million). ($1 = 152.1000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

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