Sri Lankan rupee forwards close higher on strong remittances

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imageCOLOMBO: Lankan rupee forwards ended firmer on Monday as inflows from strong remittances and exporter dollar sales outpaced thin importer demand for the greenback, dealers said.

Actively traded one-week forwards ended at 133.33/38 per dollar, compared to Thursday’s close of 133.40/45. Two-week forwards ended at 133.43/50 per dollar, compared with their previous close of 133.58/65.

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Both stock and currency markets were closed on Friday for Buddhist and Christian religious holidays.

“There are seasonal inflows, inflow to pay bonuses and remittances,” said a currency dealer on condition of anonymity.

“There are not much of import bills other than the bills.”

People were converting dollars into rupees ahead of public holidays on April 13 and 14, dealers said, adding the rupee was expected to gain on higher seasonal inward remittances ahead of the Sinhala-Tamil New Year on April 14.

The central bank through moral suasion prevented the spot rupee from dropping below 132.90/133.20, a limit set in February.

Central bank officials were not available for comment.

Dealers said the market may wait for more cues on interest rates after T-bill yields fell for a third straight week, though the government’s borrowing has shot up sharply due to its populist policies ahead of a parliamentary poll.

Yields on T-bills fell between 55 basis points and 63 basis points in the last three weekly auctions, though the fall in interest rates is slowing.

Copyright Reuters, 2015

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