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Sri Lankan rupee edges up in dull trade; stocks steady
May 15, 2017 / 5:44 AM / 7 months ago

Sri Lankan rupee edges up in dull trade; stocks steady

COLOMBO, May 15 (Reuters) - The Sri Lankan rupee rose slightly in dull trade on Monday on mild dollar selling by exporters, dealers said.

Rupee forwards were active, with the spot-next at 152.50/60 per dollar at 0458 GMT, compared with Friday’s close of 152.55/65. Two-week forwards traded at 152.85/153.00 per dollar, compared with Friday’s close of 153.00/20.

The spot rupee, which resumed trading on May 5 after four months, was not active on Monday, with the central bank’s reference rate at 152.10.

“There are some exporter (dollar) sales but slight demand (for dollar) remains,” said a currency dealer.

Dealers said the positive news about the Generalised System of Preferences Plus also helped the rupee to appreciate.

The Sri Lankan government said in a statement on Thursday that the Council of Ministers of the European Union had approved the country’s GSP Plus application and the official notification on its entry will be finalised next week.

Finance Minister Ravi Karunanayake said on Sunday revenue rose 17 percent in the first quarter compared with a year ago, surpassing the government’s expectations, due to higher tax collection.

Central Bank Governor Indrajit Coomaraswamy said on Tuesday that the monetary authority did not want to allow the rupee to fall “too quickly”, but suggested further weakness in the exchange rate is on the cards as policymakers sought a competitive currency.

The downward adjustment on the spot currency was to make the rupee more competitive, he added.

The monetary authority on Tuesday kept the policy rates steady as expected, saying inflation was expected to decelerate to mid-single digit levels by end-2017.

Sri Lanka drew a blowout response in its return to the international bond market, attracting orders of more than $11 billion from 500 accounts for a $1.5 billion 10-year bond.

Currency dealers expect higher dollar liquidity from the inflows to help stabilise the rupee.

The country saw inflows of $1.5 billion last week from a sovereign bond and also expects $1 billion from two separate syndicated loans, and the central bank chief said a $450 million syndicated loan is almost decided and the inflows are expected next week.

The central bank has allowed the currency to gradually depreciate since mid-December, revising its spot reference rate multiple times.

The island nation has seen inflows into equities and government securities since early April.

Sri Lankan shares were steady at 6,672.57 as of 0525 GMT. Turnover stood at 70.2 million rupees ($460,328).

$1 = 152.5000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez

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