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Sri Lankan rupee steady on dollar inflow expectations
May 3, 2017 / 12:09 PM / 7 months ago

Sri Lankan rupee steady on dollar inflow expectations

COLOMBO, May 3 (Reuters) - The Sri Lankan rupee ended steady on Wednesday as importer dollar demand was offset by exporter sales amid expectations of dollar inflows from a sovereign bond issuance and syndicated loans, dealers said.

The central bank raised the spot rupee reference rate by 20 cents to 152.10.

Sri Lanka expects to raise up to $1.5 billion via a sovereign bond issuance and another $1 billion from two separate syndicated loans.

Rupee forwards were active, with two-week forwards steady at 153.30/25 per dollar.

“The (importer) demand was there. There have been some selling by exporters and banks too,” a currency dealer said, asking not to be named.

Dealers expect the rupee to stabilise on higher dollar liquidity after the anticipated inflows.

A government move to double the borrowing limit of development bonds to $3 billion in 2017 is also expected to increase liquidity.

Finance Minister Ravi Karunanayake had last week blamed “technical difficulties” for a two-month delay in receiving an around $160 million loan tranche from the International Monetary Fund and said the disbursement was expected after June 14.

Sri Lanka has seen a rise in foreign inflows into equities and government securities since early last month, with foreign investors buying shares worth a net 13.7 billion rupees in 26 consecutive sessions through Friday.

Foreign investors also net bought government securities worth 908.9 million rupees ($5.98 million) in the week ended April 26, extending the net inflow to 7.2 billion rupees in four consecutive weeks. But they have net sold 57 billion rupees worth of government bonds so far this year. ($1 = 151.9000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Vyas Mohan)

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