COLOMBO May 22 The Sri Lankan rupee weakened on
Monday on dollar demand from importers and was seen easing
further after the central bank said it would buy dollars
directly from the market to boost reserves.
The central bank is targeting $1.2 billion in direct market
purchases of dollars to boost the island nation's reserves this
year, Indrajit Coomaraswamy, the monetary authority's chief,
said on Thursday.
Dealers said dollar selling by state banks prevented a
steeper decline, but it was not clear whether the state banks
sold dollars on behalf the central bank.
Central bank officials were not immediately available for
Rupee forwards were active, with spot-next forwards
trading at 152.95/153.00 per dollar, compared with Friday's
close of 152.90/153.00.
Two-week forwards traded at 153.35/45, compared with the
previous session's close of 153.30/40.
The spot rupee did not trade on Monday.
The central bank fixed the spot rupee reference rate at
152.50 on May 5.
A currency dealer said the market was awaiting policies from
the new finance minister, Mangala Samaraweera, after President
Maithripala Sirisena switched the finance and foreign ministers
in a cabinet reshuffle on Monday in a bid to restore confidence
in the administration's handling of the economy.
"Everybody is awaiting for the direction from the new
finance minister. We don't know whether he will push through the
reforms of the former minister or he will have his own," the
The new appointment came after Sri Lanka missed its
December-end reserves target agreed with the International
Monetary Fund (IMF) for a $1.5 billion, 36-month loan.
Coomaraswamy said the central bank has purchased around $400
million directly from the market so far this year.
The central bank has allowed the currency to gradually
depreciate since mid-December, revising its spot reference rate
Sri Lankan shares were down 0.2 percent at 6,718.41
as of 0636 GMT. Turnover stood at 238.2 million Sri Lankan
rupees ($1.56 million).
($1 = 152.8000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by