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Sri Lanka rupee forwards firmer on bank dollar sales; stx up

Sri Lanka rupee forwards firmer on bank dollar sales; stx upCOLOMBO: Sri Lankan rupee forwards traded a tad firmer on Thursday as banks dollar sales outpaced importer dollar demand, while concerns over a government probe into bond sales since 2012 hurt sentiment, dealers said.

Actively-traded two-week rupee forwards stood at 133.90/134.05 per dollar at 0521 GMT, firmer from Wednesday’s close of 134.00/134.10.

“Rupee is firmer as some banks are selling dollars,” said a currency dealer asking not to be named.

Sri Lanka has launched a probe into allegations of corruption in government bond sales held by the central bank since 2012, the prime minister said on Tuesday, after opposition parties called for an independent investigation into a February bond auction.

Prime Minister Ranil Wickremesinghe said on Tuesday that the central bank had raised funds through private placement under the former government and that “parcels of government bonds were handed out to selected individuals on a favoured basis”.

The central bank said in a statement on Wednesday that Governor Arjuna Mahendran would be on leave during the period of inquiry into the 30-year treasury bond issuance.

The central bank also prevented a fall in the spot rupee and one-week forwards at 132.90/133.20 and 133.60/75, respectively, within the limits set by it.

Central bank officials were not available for comment.

The main stock index was up 0.16 percent at 7,055.40 at 0524 GMT, edging up from its 6-week low hit on Wednesday. Turnover was 71.1 million rupees.

Copyright Reuters, 2015

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