February 28, 2017 / 7:25 AM / 9 months ago

Sri Lankan rupee rises on exporter dollar sales; stocks up

COLOMBO, Feb 28 (Reuters) - The Sri Lankan rupee rose for a third straight session on Tuesday, helped by exporter dollar sales, but the gains were capped by concerns about possible further depreciation in the local currency in the absence of central bank guidance, dealers said.

Rupee forwards were active with two-week forwards trading at 151.70/80 per dollar, compared with Monday’s close of 152.00/30.

The rupee has been under pressure due to dollar demand from importers ahead of the traditional Sinhala-Tamil new year in mid-April and as foreign investors continue to sell government securities, dealers said.

Foreign investors sold a net 15.37 billion rupees ($101.62 million) in the week ended Feb. 22, extending the outflow from government securities to 64.5 billion rupees.

Sri Lanka could face balance-of-payments pressure due to foreign outflows from government securities, a government document showed last week, even as the island nation is in the process of raising up to $2.5 billion from foreign borrowing.

The rupee has weakened 1.1 percent so far this year. It fell 3.9 percent last year, following a 10 percent drop in 2015.

Sri Lankan shares were 0.11 percent firmer at 6,130.62 as of 0656 GMT. Turnover was 352.1 million rupees. ($1 = 151.2500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

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