COLOMBO Oct 10 The Sri Lankan rupee fell on
Monday due to importer dollar demand ahead of the festival
season in December, dealers said, adding the local currency
would remain under pressure due to continued dollar demand from
importers until year-end.
The spot rupee was quoted between 146.85 and 146.95
per dollar, but there was hardly any trade for a second day,
dealers said. It closed at 146.88/95 last Thursday.
Rupee forwards were active, and the spot-next ended
at 147.15/25, compared with the previous session's close of
146.95/147.05, dealers said.
"Seasonal importer demand is there. The spot did not trade
because dealers are scared of the central bank's retribution
after the moral suasion," a currency dealer said, asking not to
"But the moral suasion eased towards the end of the day."
Dealers said purchases of government securities by foreign
investors have slowed with a decline in interest rates, while
the central bank has been buying dollars from the market to
accumulate reserves to meet targets set by the International
Monetary Fund under a $1.5-billion loan deal.
Officials at the central bank were not available for
The central bank has been under pressure from the IMF to
continue rebuilding international reserves and maintain exchange
rate flexibility to develop the foreign exchange market further.
The central bank usually intervenes to curb volatility in
The rupee has been under pressure due to importer dollar
demand, posting a 0.4 percent fall last week, following a 0.65
percent loss in the preceding week.
The government wants a strong currency through higher
foreign inflows and without interventions, Finance Minister Ravi
Karunanayake has said.
($1 = 146.3700 Sri Lankan rupees)
(Reporting by Shihar Aneez; Editing by Biju Dwarakanath)