COLOMBO May 26 The Sri Lankan rupee ended
slightly higher on Friday as dollar selling by banks surpassed
importer demand for the U.S. currency, traders said.
Rupee forwards were active, with spot-next forwards
ending at 152.85/95 per dollar, compared with Thursday's close
One-week forwards ended at 153.00/10, compared with the
previous close of 153.10/20.
There was a demand for dollars from a few local banks, said
a currency dealer, adding that foreign banks were also selling
the U.S. currency, maybe due to inflows into the stock market
and unwinding of some of their dollar positions.
Dealers said the rupee is also under pressure after the
central bank governor said last week that the bank will allow
gradual depreciation of the currency.
Sri Lanka's 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 plan will keep the rupee
under pressure, with the market expecting about 4-6 percent
depreciation in the currency this year.
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 = 152.3500 Sri Lankan rupees)
(Reporting by Ranga Sirilal; Editing by Sherry Jacob-Phillips)