COLOMBO Feb 9 The Sri Lankan rupee traded
steady on Thursday ahead of a long weekend as dollar sales by
exporters offset the demand for the U.S. currency from banks to
facilitate continuing exit of foreign investors from government
securities, dealers said.
Sri Lanka's stock and foreign exchange markets will be
closed on Friday for a Buddhist religious holiday.
Rupee forwards were active and two-week forwards
traded steady at 151.20/25 per dollar as of 0631 GMT.
"The rupee is trading steady after yesterday's exporter
conversions," said a currency dealer asking not to be named. "I
don't expect much to happen until Monday because of the long
Sri Lanka's central bank governor, Indrajit Coomaraswamy,
said on Wednesday the central bank was not planning to abruptly
scrap its support for the rupee.
"It will be a gradual one. You have seen what has happened
last month or two. That's the pattern," Coomaraswamy said.
The central bank has allowed the rupee to gradually
depreciate since mid-December, revising its spot reference rate
The rupee has weakened 0.6 percent so far this year and has
been under pressure due to rising imports and net selling of
government securities by foreign investors, while the central
bank said defending the currency with foreign exchange reserves
did not "seem sensible".
The central bank kept its key rates steady on Tuesday for a
sixth straight month, but flagged possible "corrective measures"
in the months ahead in a sign further tightening might be on the
cards to temper inflation pressures and safeguard a fragile
Foreign investors net sold 26.6 billion rupees ($177.10
million) worth of government securities in the four weeks to
Feb. 1, according to the latest central bank data.
Sri Lankan shares were largely flat at 6,097.47, as
of 0704 GMT. Turnover stood at 364.1 million rupees ($2.42
($1 = 150.7000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by