* Exporter convert dlrs, IMF approval boost sentiment
* Shares up; tax raise, interest rates weigh
COLOMBO, April 3 Sri Lanka's rupee gained
1.7 percent Tuesday as exporters sold dollars after the
International Monetary Fund approved disbursement of a
long-delayed loan tranche of $426.8 million to the government.
The rupee strengthened to 126.00/126.30 a dollar from
Monday's close of 128.25/128.30. Dealers said the currency
strengthened to 125.60 some importer dollar demand curbed the
surge. The currency has risen 4.3 percent since hitting a record
low of 131.60 on March 19.
But it has fallen 9.4 percent since the central bank stopped
defending it on Feb. 9.
The IMF on Tuesday approved the eighth tranche of Sri
Lanka's $2.6 billion loan with waivers after the island nation
adopted a flexible exchange rate and took measures to avert a
On Tuesday, the central bank said the country's reserves had
increased to $6.1 billion after the IMF approval and were enough
to cover 3.6 months imports, which should help improve
confidence that the monetary authority's could handle a sudden
flight of foreign capital.
The stock market edged up 0.3 percent or 17.95 points
to 5,416.65 on Tuesday as the IMF announcement gave some
confidence to retail investors while block deals in Commercial
Bank of Ceylon PLC, which edged up 0.30 percent,
pushed the turnover.
Analysts said investors still remained cautious of rising
interest rates, the direction of rupee and an expected fall in
The day's turnover was 1.53 billion Sri Lanka rupees ($11.93
million), slightly above this year's daily average of 1.37
billion. Foreign investors were net buyers of 374 million.
The Colombo bourse is one of the worst performers this year
among Asian markets, with a 10.83 percent loss.
($1 = 128.3000 Sri Lanka rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Bryson