COLOMBO May 17 The Sri Lankan rupee fell on
Wednesday led by usual importer dollar demand, but dealers said
depreciation pressure on the currency has eased on strong
inflows from foreign borrowings.
Rupee forwards were active, with spot-next forwards
trading at 152.80/95 per dollar as of 0607 GMT, compared with
Tuesday's close of 152.70/80.
One-week forwards traded at 153.00/15 per dollar, compared
with Tuesday's close of 152.90/153.00.
"We see usual day-to-day importer dollar demand. The
depreciation pressure has eased since the sovereign loan came
in, but we do not see any intervention by the central bank," a
currency dealer said asking not to be named.
"The dollar supply is used by importers unless there is a
huge import bill. The central bank intervenes by just directing
the market through adjusting the spot reference rate. The market
is now determining the exchange rate unlike in the past."
The spot rupee did not trade on Wednesday. The
central bank fixed the spot rupee reference rate at 152.50 on
Central Bank Governor Indrajit Coomaraswamy said last week
that the monetary authority did not want to allow the rupee to
fall "too quickly", but suggested further weakness in the
exchange rate was on the cards as policymakers sought a
The downward adjustment to the spot currency was to make the
rupee more competitive, he added.
The central bank has allowed the currency to gradually
depreciate since mid-December, revising its spot reference rate
Sri Lanka regained a lucrative European Union trade
concession with effect from Friday, but the market shrugged off
the decision, with analysts saying they were waiting to see the
real impact of the facility.
Sri Lanka received $1.5 billion last week from a 10-year
sovereign bond, while another $450 million from a syndicated
loan is expected soon.
Sri Lankan shares were up 0.26 percent at 6,709.64 as
of 0616 GMT. Turnover stood at 327.2 million rupees ($2.15
($1 = 152.4000 Sri Lankan rupees)
(Reporting by Shihar Aneez and Ranga Sirilal; Editing by Biju