COLOMBO, March 22 The Sri Lankan rupee fell on
Wednesday due to dollar demand from importers, even as the
market waited for cues on the direction of key interest rates
from the country's central bank which meets to discuss monetary
policy later this week.
Rising imports and outflow from rupee bond sales by foreign
investors, however, are expected to exert pressure on the
currency, dealers said.
Rupee forwards were active, with two-week forwards
trading at 152.45/55 per dollar at 0830 GMT, from Tuesday's
close of 152.40/45.
"Some exporter sales helped prevent a steeper fall," said a
currency dealer, asking not to be named. "We hope the central
bank will raise the interest rates to help ease the pressure on
The central bank raised the spot rupee reference rate by 25
cents to 151.60 on Monday. It has been preventing spot rupee
trades below 151.35 per dollar since March 8.
Central bank officials were not available for comment.
Foreign investors net sold government securities worth 1.41
billion rupees ($9.28 million) in the week ended March 15. This
came after two weeks of net inflows.
They have net sold 63.3 billion rupees of such instruments
so far this year.
The rupee has fallen 1.27 percent so far this year, and
dealers say they expect the currency to weaken 6-8 percent in
2017. It lost 3.9 percent against the dollar last year.
Sri Lankan shares were down 0.78 percent at 5,993.84,
as of 0837 GMT. Stockbrokers said concerns over a possible rate
hike this week was weighing on sentiment.
Turnover stood at 830.7 million rupees ($5.48 million).
($1 = 151.5000 Sri Lankan rupees)
(Reporting by Shihar Aneez; Editing by Biju Dwarakanath)