COLOMBO May 23 The Sri Lankan rupee ended
slightly firmer in dull trade on Tuesday as two foreign banks
sold dollars though traders say the currency is set to ease
further on dollar demand from importers and a central bank move
to buy the greenback to boost reserves.
The central bank has purchased around $400 million directly
from the market so far this year, governor Indrajit Coomaraswamy
said last week, adding it was targeting $1.2 billion in direct
market purchases of dollars to boost the island nation's
reserves this year.
Dealers said the central bank's action will keep the rupee
under pressure, with the market consensus expecting 4-6 percent
depreciation of the currency this year.
Rupee forwards were active, with spot-next forwards
closing at 152.80/90 per dollar, compared with Monday's close of
One-week forwards were at 152.90/153.00 at the close of
trade, compared with the previous session's close of 153.00/10.
"There was some selling by two foreign banks," said a
currency dealer, adding that trading was subdued.
The spot rupee did not trade on Tuesday.
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
Currency dealers said the market was waiting for policy
direction from new finance minister Mangala Samaraweera after
President Maithripala Sirisena switched the finance and foreign
ministers in a cabinet reshuffle on Monday in a bid to restore
confidence in the administration's handling of the economy.
The appointment came after Sri Lanka missed its December-end
reserves target agreed with the International Monetary Fund
(IMF) for a $1.5 billion, 36-month loan.
($1 = 152.7500 Sri Lankan rupees)
(Reporting by Ranga Sirilal; Editing by Biju Dwarakanath)