COLOMBO May 19 The Sri Lankan rupee ended
weaker on Friday on importer dollar demand and fewer exporter
conversions, even as investors said the currency could weaken
further after the central bank decided to buy dollars directly
from the market to boost reserves.
Dealers said the state bank dollar sales curbed further
Rupee forwards were active, with spot-next forwards
ending at 152.90/153.00 per dollar, compared with Thursday's
close of 152.85/90. One-week forwards ended at 153.15/30,
compared with the previous session's close of 152.95/153.00.
Sri Lanka's central bank is targeting $1.2 billion in direct
market purchases of dollars to boost the island nation's
reserves this year, Indrajit Coomaraswamy, the monetary
authority's chief, said on Thursday.
That comes after Sri Lanka missed its December-end reserves
target agreed with the International Monetary Fund (IMF) for a
$1.5 billion, 36-month loan.
Coomaraswamy said the central bank has purchased around $400
million directly from the market so far this year.
"There was some (dollar) demand from a foreign bank
probably for bond outflow. A state bank sold dollars which
prevented the fall," a currency dealer said, asking not to be
"Exporters are not converting after the central bank
announcement. They are watching the situation and we can see
some importer demand."
Dealers said it was not clear weather the state banks sold
dollars on behalf the central bank.
Central bank officials were not immediately available for
The spot rupee did not trade on Friday.
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
($1 = 152.8000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry