COLOMBO May 12 The Sri Lankan rupee ended
slightly firmer in dull trade on Friday due to mild dollar
selling by exporters.
Rupee forwards were active, with the spot-next ending
at 152.55/65 per dollar, compared with Tuesday's close of
152.65/75. Two-week forwards closed at 153.00/20 per dollar,
compared with Tuesday's close of 153.10/20.
Sri Lankan financial markets were closed on Wednesday and
Thursday for a Buddhist religious holiday.
The spot rupee, which resumed trading on May 5
after four months, was not active on Friday, with the central
bank's reference rate at 152.10.
"There were exporter (dollar) sales today after the positive
news about the GSP plus (Generalised System of Preferences
Plus)," said a currency dealer, referring to a European Union
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 the entry will be finalised next week.
Sri Lanka's 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.
Coomaraswamy said the sovereign bond inflows were expected
by the end of this week.
Currency dealers expect higher dollar liquidity from the
inflows to help stabilise the rupee.
The country also expects another $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
The island nation has seen inflows into equities and
government securities since early April.
($1 = 152.5000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by