August 5, 2013 / 11:45 AM / 4 years ago

Sri Lanka rupee ends firmer on dollar sales by exporters

COLOMBO, Aug 5 (Reuters) - The Sri Lankan rupee ended
firmer on Monday as exporter dollar sales offset early importer
demand, and a vigilant central bank eager to hold the greenback
below 131.60 rupees also forced dealers to shift to forward
trades.
    Dealers said they moved to one-day forwards instead of spot
trade after the central bank's earlier direction to banks not to
accept bids above 131.60 rupees per dollar.
    The one-day forward, which was weaker in early trade, ended
firmer at 131.62/65 per dollar from Friday's close of 131.65/70.
    "There was some exporter conversion in the latter part of
the day," said a currency dealer on condition of anonymity.
    Central bank officials were not available for comment.
    Dealers said the pressure on the currency remained as
exporters adopted a wait-and-see approach, while remittances had
also dried up. The downward pressure on the rupee could
intensify if there were no dollar inflows in the short term,
they added.
    The rupee has fallen around 4 percent since June 7, with
foreign investors pulling out of Sri Lanka's treasury bonds due
to a rise in U.S. treasury yields. 
    Dealers expect the rupee to move in a 131.50 to 132.00 range
in the short term and continue to depreciate unless the central
bank steps in with monetary tightening measures or dollar
inflows increase significantly.

 (Reporting by Ranga Sirilal; Editing by Prateek Chatterjee)

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