COLOMBO Dec 27 The Sri Lankan rupee fell on
Tuesday on thin importer dollar demand after a long weekend as
the market waited for direction from the central bank after it
said depreciation of the currency was not necessarily negative
for the economy, dealers said.
The central bank said on Friday that "it is important to
understand that depreciation of the rupee has not only negative
implications, but also positive implications on the Sri Lankan
Rupee forwards were active, with one-week forwards
trading at 150.00/20 per dollar, down from Friday's close of
149.75/90. The markets were closed for a special bank holiday on
Monday in lieu of Christmas holiday on Sunday.
"There was some small amount of importer demand. The market
is very quiet," said a currency dealer asking not to be named.
Spot-next forwards and the spot rupee were hardly
traded, dealers said.
Some dealers said they expect the central bank to allow
market forces to determine the rupee's direction next year,
while others said the bank would have to let the currency
depreciate or raise key policy rates at a monetary board meeting
The central bank increased the spot reference rate by 30
cents to 149.10 after the U.S Federal Reserve raised interest
rates by 25 basis points earlier this month.
Sri Lankan shares were steady near their lowest since
April 6 as of 0804 GMT.
Turnover stood at 67.1 million rupees ($449,732).
($1 = 149.2000 Sri Lankan rupees)
(Reporting by Shihar Aneez; Editing by Biju Dwarakanath)