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Sri Lanka rupee steady; importer dlr demand offsets exporter sales
June 28, 2017 / 6:14 AM / 6 months ago

Sri Lanka rupee steady; importer dlr demand offsets exporter sales

COLOMBO, June 28 (Reuters) - The Sri Lankan rupee traded steady on Wednesday as dollar demand from importers offset greenback sales by exporters, dealers said.

However, the rupee was under pressure on an expected rise in imports.

The spot rupee, which has been trading for the seventh straight session after being inactive for six weeks, traded at 153.32/40 per dollar at 0536 GMT, unchanged from Tuesday’s close.

The spot rupee resumed trading on June 19 for the first time since May 5 when the central bank fixed its reference rate at 152.50.

“The (dollar) demand is there and state banks were on the buying side, probably to cover import bills,” said a currency dealer, requesting anonymity.

Dealers said they expect seasonal demand for the dollar to pick up from August.

Investors shrugged off a policy rate decision by the central bank, which held key rates steady as expected, dealers said.

The central bank kept its benchmark interest rate steady on Friday, saying the current monetary policy was appropriate as it expected the economy to recover in the second half of the year.

The rupee has been under pressure after the central bank said it would allow gradual depreciation of the currency and set a target of $1.2 billion in direct market purchases of dollars to boost the island nation’s reserves this year, mainly to meet a target set by the International Monetary Fund for a three-year $1.5 billion loan.

Analysts have said that if the U.S. Federal Reserves tightens monetary policy more aggressively than the market expects over the coming months, there is a risk of further falls in the rupee against the U.S. dollar.

Sri Lankan shares were up 0.08 percent at 6,708.79, as of 0538 GMT. Turnover stood at 98.6 million rupees ($643,813.25). ($1 = 153.1500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)

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