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Sri Lankan rupee steady; importer dollar demand weighs
July 11, 2017 / 5:58 AM / 4 months ago

Sri Lankan rupee steady; importer dollar demand weighs

COLOMBO, July 11 (Reuters) - The Sri Lankan rupee traded steady on Tuesday as importer dollar demand offset the selling of the U.S. currency by banks and exporters, dealers said.

The spot rupee traded steady at 153.73/80 per dollar at 0529 GMT, unchanged from Monday’s close.

“The demand is there but we can see some (dollar) conversions time to time, which prevents a sharp depreciation of the currency,” said a currency dealer, who declined to be identified.

“The dollar demand from state banks is there.”

Dealers also said the market has priced in further depreciation of the rupee because of the central bank’s no-intervention policy.

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.

Dealers said they expected seasonal demand for dollars to pick up from August.

The rupee has been under pressure since early this year after the central bank stopped providing support for the currency at a time when the island faces a balance of payments crunch.

The central bank is also compelled to buy dollars from the market to meet the reserve target set by the International Monetary Fund (IMF) under a $1.5 billion, three-year loan programme.

Sri Lankan shares were down 0.24 percent at 6,742.2, as of 0557 GMT. Turnover stood at 125 million rupees ($813,802.08).

$1 = 153.6000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sherry Jacob-Phillips

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