COLOMBO, Sept 29 The Sri Lankan rupee edged down
on Thursday ahead of a bond auction as investors bought the
local currency to buy bonds, and as importer demand for dollars
exceeded greenback sales by exporters, dealers said.
The spot rupee was trading at 146.75/85 per dollar,
compared with Wednesday's close of 146.62/70.
"Investors want to be in cash to buy bonds at today's
auction," a currency dealer said asking not to be named.
"There is a strong speculation that today will be the last
bond auction for this year. So the only option investors will
have is T-bills."
Central bank officials were not available for comments on
Another dealer said ample rupee liquidity in the absence of
less fixed-income instrument could help reduce the market
"Very little exporter conversions or remittances were
witnessed in the market today. Foreign investors who are into
bond buying were also not seen."
Sri Lanka's central bank held its key policy interest rates
steady on Wednesday, a widely expected decision that analysts
say suggested policy makers were keen to support a slowing
economy even as they kept a tight leash on rampant credit
After the rate decision, T-bill yields dipped between 16 and
33 basis points.
Private sector credit growth was at 28.5 percent
year-on-year in July, its highest since August 2012, but central
bank chief Indrajith Coomaraswamy on Wednesday said the central
bank expected the credit expansion rate to slow to 20 percent by
The central bank is under pressure from the International
Monetary Fund (IMF) to continue rebuilding international
reserves and maintain exchange rate flexibility to develop the
foreign exchange market further.
Sri Lankan shares gained, with the benchmark Colombo stock
index rising as much as 0.3 percent at 6,531.31 as of
0738 GMT. Turnover was at 302.7 million rupees ($2.07 million).
($1 = 146.1000 Sri Lankan rupees)
(Reporting by Shihar Aneez; Editing by Sherry Jacob-Phillips)