COLOMBO May 31 Sri Lankan rupee traded steady
on Wednesday amid expectations that the currency would weaken,
as recent floods and landslides that killed over 200 people
dented market sentiment, dealers said.
The extent of the damage is yet to be assessed, with Sri
Lanka's main agricultural exports - tea and rubber - hit by the
worst torrential rains in 14 years due to the cyclone "Mora"
formed in the Bay of Bengal.
The floods would have an adverse impact on agricultural
exports, putting pressure on the rupee, currency dealers said.
Analysts said hospitality and manufacturing sectors are likely
to be the worst-hit industries during the floods.
Rupee forwards were active on Wednesday, with
spot-next forwards trading at 152.95/153.10 per dollar at 0530
GMT, largely unchanged from Tuesday's close of 152.95/153.00 per
"The demand (for dollars) is still there, and a few exporter
conversions were seen. But we haven't seen much activities.
There has been very little inflows of dollars," said a currency
The floods could also put pressure on the overall GDP and
government budget deficit with high infrastructure spending,
The rupee has been under pressure after the central bank
governor on May 18 said the bank would allow gradual
depreciation of the currency, they said.
The spot rupee did not trade on Wednesday.
The central bank fixed the spot rupee reference rate at
152.50 on May 5.
Foreign investors bought a net 14.6 billion rupees ($95.61
million) worth of government securities in the two weeks ended
May 24. They have sold a net 42.1 billion rupees worth of
securities so far this year.
Sri Lankan shares were up 0.19 percent at 6,667.64,
as of 0540 GMT. Turnover stood at 68.4 million rupees
($1 = 152.5000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry