COLOMBO Dec 29 The Sri Lankan rupee traded
slightly weaker on Thursday due to unusual year-end importer
dollar demand, while moral suasion by the central bank capped
further losses in one-week rupee forwards, dealers said.
Dealers said the market was bracing for some depreciation in
the rupee in January after the central bank said on Friday that
depreciation of the currency was not necessarily negative for
Rupee forwards were active, with one-week forwards
trading at 150.15/25 per dollar, down from Wednesday's close of
Spot-next forwards and the spot rupee were hardly
traded, dealers said.
"We expect some kind of depreciation in the new year after
the central bank's statement last week," a currency dealer said
on condition of anonymity.
"The central bank does not want to trade one-week forwards
below 150.15. But there is unusual importer demand. Usually we
do not see this kind of importer demand in the year-end."
Officials from the central bank were not immediately
available for comment.
A government move to borrow $1 billion to finance some
infrastructure projects is cause for some optimism, dealers
"If that money comes, we may see some easing of the downward
pressure (on the rupee)," the dealer said.
Sri Lanka intends to raise up to $1 billion via foreign
currency term financing facility to finance the import elements
of development projects specified in the 2017 budget, the
government said on Wednesday.
The central bank on Wednesday raised the spot reference rate
by 30 cents to 149.80. It raised the reference rate by 40 cents
each in the previous two weeks.
Sri Lankan shares were 0.15 percent firmer as of 0758
GMT, moving away from their lowest close since April 6 hit on
Turnover stood at 697.6 million rupees ($4.66 million).
($1 = 149.8000 Sri Lankan rupees)
(Reporting by Shihar Aneez; Editing by Biju Dwarakanath)