COLOMBO May 23 The Sri Lankan rupee was steady
on Tuesday, though traders say the currency is set to ease
further on importers' demand for dollars and a central bank move
to buy the greenback to boost its reserves.
The central bank has purchased around $400 million directly
from the market so far this year, governor Indrajit Coomaraswamy
said on Thursday.
Last week, Coomaraswamy said the central bank is targeting
$1.2 billion in direct market purchases of dollars to boost the
island nation's reserves this year.
Dealers said the central bank's action will keep the rupee
under pressure, with the market consensus expecting 4-6 percent
depreciation of the currency this year.
Rupee forwards were active, with spot-next forwards
trading steady at 152.85/95 per dollar, as of 0452 GMT, compared
with Monday's close of 152.85/95.
Two-week forwards were at 153.20/45, compared with the
previous session's close of 153.20/35.
"There is some selling by a foreign bank," said a currency
dealer, who added that trading was subdued.
The spot rupee did not trade on Tuesday.
The central bank fixed the spot rupee reference rate at
152.50 on May 5.
The central bank has allowed the currency to gradually
depreciate since mid-December, revising its spot reference rate
a multiple times.
Currency dealers 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.
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.
Sri Lankan shares were down 0.26 percent at 6,709.40,
as of 0501 GMT. Turnover stood at 448.8 million Sri Lankan
rupees ($2.94 million).
($1 = 152.7500 Sri Lankan rupees)
(Reporting by Ranga Sirilal; Editing by Sherry Jacob-Phillips &