COLOMBO, March 24 The Sri Lankan rupee closed
lower on Friday on importer dollar demand, even as the country's
central bank raised benchmark interest rates by 25 basis points
in a move also aimed at easing pressure on the currency.
The central bank raised interest rates for the first time in
eight months, saying tighter policy was a precaution against a
build-up of inflationary pressures.
The rate hike could help stabilise the rupee as rising
imports and outflows due to rupee bond sales by foreign
investors have exerted pressure on the currency, analysts said.
Rupee forwards were active, with two-week forwards
closing at 152.60/70 per dollar, compared with Thursday's close
"There was importer dollar demand. We have seen a state bank
buying dollars, maybe to cover a large oil bill," said a
currency dealer, asking not to be named.
The central bank raised the spot rupee reference
rate by 25 cents to 151.60 on Monday.
Foreign investors net sold government securities worth 1.41
billion rupees ($9.3 million) in the week ended March 15, after
two weeks of net inflows.
They have net sold 63.3 billion rupees of such instruments
so far this year.
($1 = 151.6000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju