COLOMBO May 18 The Sri Lankan rupee ended
steady on Thursday, erasing gains from earlier in the day on
investor concerns that the currency would fall after the central
bank set a target for buying dollars directly from the market in
a bid to boost reserves.
Rupee forwards were active, with spot-next forwards
closing steady at 152.85/90 per dollar. One-week forwards also
were steady at the close of trade, at 152.95/153.00 per dollar.
Sri Lanka's central bank is targetting $1.2 billion in
direct market purchases of dollars to boost the island nation's
reserves this year, said Indrajit Coomaraswamy, the monetary
authority's chief, on Thursday.
That comes after Sri Lanka missed its end-December reserves
target agreed with the International Monetary Fund (IMF) for a
$1.5 billion, 36-month loan.
"The move will definitely put pressure on the rupee at a
time when the central bank is not defending it and the market is
determining the exchange rate," a currency dealer said asking
not to be named.
The spot rupee did not trade on Thursday.
The central bank fixed the spot rupee reference rate at
152.50 on May 5.
The central bank has allowed the currency to gradually
depreciate since mid-December, revising its spot reference rate
(Reporting by Shihar Aneez and Ranga Sirilal; Editing by Biju