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Sri Lankan rupee rises slightly in dull trade; stocks down
March 10, 2017 / 7:14 AM / 9 months ago

Sri Lankan rupee rises slightly in dull trade; stocks down

COLOMBO, March 10 (Reuters) - The Sri Lankan rupee rose slightly on Friday in dull trade as exporter dollar sales surpassed the importer greenback sales a day after central bank’s moral suasion curbed further decline, dealers said.

Rupee forwards were active, with two-week forwards trading at 152.10/30 per dollar, compared with Thursday’s close of 152.20/30.

“It’s been very silent after yesterday’s moral suasion reversed some deals. There are some exporter (dollar) sales,” said a currency dealer on condition of anonymity.

“There could be some (inward) remittances since it’s a Friday,” he added.

Central bank officials were not available for comment.

International Monetary Fund on Wednesday urged the country’s central bank to rebuild foreign reserves while maintaining exchange rate flexibility.

Following its second review of a $1.5-billion three-year loan programme, the IMF said it had discussed with Sri Lankan authorities the need to push forward with reforms due to an uncertain external environment.

Dealers expect the rupee to depreciate between 6 percent and 8 percent this year.

Analysts said inflow from up to $1.5 billion sovereign bond issue sooner than later could help ease some pressure on the currency.

Sources who know about the bond deal said top central bank officials have already left for the United States for a road show for the sovereign bond issue announced last month.

S&P Global Ratings said in a statement on Tuesday it considers exchange rate stability will remain a major priority for Sri Lanka’s policymakers and its central bank, limiting monetary flexibility.

The central bank is struggling to maintain a flexible exchange rate in the face of heavy foreign outflows from government securities. The rupee has depreciated 1.2 percent so far this year, having lost 3.9 percent of its value against the dollar last year.

Foreign investors bought a net 701 million rupees ($4.64 million) worth of government securities in the week ended March 1, recording the first weekly net inflow for the year. They have sold a net 63.76 billion rupees of such instruments so far this year.

Sri Lankan shares were down 0.06 percent at 6,085.21, as of 0700 GMT. Turnover stood at 499.3 million Sri Lankan rupees ($3.30 million).

$1 = 151.3500 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips

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