COLOMBO May 9 Sri Lankan rupee forwards traded
slightly firmer on Tuesday in dull trade due to exporter selling
of U.S. currency and inward remittances, while expected dollar
inflows from sovereign bonds curbed losses in the local
currency, dealers said.
Central Bank Governor Indrajit Coomaraswamy after the
monetary policy decision on Tuesday said the central bank does
not want to allow the rupee to fall "too quickly" and wants to
ensure a competitive exchange rate.
The monetary authority before the markets kept the policy
rates steady as expected saying the inflation is expected to
decelerate to mid single digit by end 2017.
Rupee forwards were active, with the spot-next
trading at 152.70/75 per dollar, as of 0736 GMT, little firmer
from Monday's close of 152.80/85. Two-week forwards were at
153.10/20 per dollar unchanged from Monday's close.
The spot rupee, which resumed trading on Friday
after four months, was not active on Tuesday, with the central
bank's reference rate at 152.10.
Sri Lankan markets will be closed on Wednesday and Thursday
to mark a Buddhist religious holiday.
Sri Lanka drew a blowout response in its return to the
international bond market, attracting orders of more than $11
billion from 500 accounts for a $1.5 billion 10-year bond.
Coomaraswamy said the sovereign bond inflows are expected by
end of this week.
Currency dealers expect higher dollar liquidity from the
inflows to help stabilise the rupee.
The country also expects another $1 billion from two
separate syndicated loans and the central bank chief said a $450
million syndicated loan is almost decided and the inflows are
expected next week.
The central bank has allowed the currency to gradually
depreciate since mid-December, revising its spot reference rate
multiple times. It has said that defending the currency with
foreign exchange reserves did not "seem sensible".
The island nation has seen inflows into equities and
government securities since early April.
Sri Lankan shares were down 0.06 percent at 6,663.31
as of 0812 GMT. Turnover stood at 538.2 million rupees ($3.53
($1 = 152.3000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry