April 6, 2017 / 6:10 AM / 8 months ago

Sri Lankan rupee edges up on bank dollar sales; stx up

COLOMBO, April 6 (Reuters) - The Sri Lankan rupee edged up in dull trade on Thursday as inward remittances and exporter dollar sales ahead of the festival season surpassed mild importer demand for greenback, dealers said.

The central bank on Wednesday cut the spot rupee reference rate by 10 cents to 151.60, dealers said.

Rupee forwards were active, with two-week forwards trading at 152.45/65 per dollar at 0538 GMT, from Wednesday’s close of 152.50/65.

Spot-next was traded at 152.05/10 per dollar compared with Wednesday’s close of 152.10/20.

“Market is very light. There is not much activity. The rupee is firmer as a foreign bank sold dollars,” said a currency dealer who did not wish to be named.

“Dollar conversions are happening ahead of the festival while importers are buying depending on the price.”

The rupee has been under pressure due to dollar demand to meet increased seasonal imports ahead of the traditional new year that is celebrated on April 13-14, dealers said.

The central bank raised interest rates by 25 basis points on March 24, for the first time in eight months, saying tighter policy was a precaution against a build-up of inflationary pressures.

The rate hike was expected to help stabilise the rupee as rising imports and outflows due to rupee bond sales by foreign investors have exerted pressure on the currency, analysts said.

Foreign investors net sold government securities worth 950 million rupees ($6.26 million) in the week ended March 29. They have net sold 64.2 billion rupees of such instruments so far this year.

Sri Lankan shares were up 0.73 percent at 6,243.66 as of 0545 GMT. Turnover stood at 126.02 million rupees ($830,718.52). ($1 = 151.7000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

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