Friday, 13 March 2015 20:46
COLOMBO: The Sri Lankan rupee ended steady on Friday due to moral suasion by the central bank amid importer dollar demand, while exporters looked for cues from market interest rates, which have been rising due to sustained borrowing by the government.
Sri Lanka’s new government has borrowed more than $ 1 billion in four days through Thursday, which economists have blamed on poor revenue and higher expenditure.
When rates become attractive, exporters convert dollars into rupees, easing pressure on the local currency, dealers said, adding the market was closely monitoring the direction of interest rates.
Meanwhile, Indian Prime Minister Narendra Modi, who is in Sri Lanka on a two-day visit, said on Friday the Reserve bank of India had entered into a $ 1.5 billion currency swap agreement with Sri Lanka’s central bank, in a move aimed at stabilising the currency.
Actively traded one-week forwards ended steady at 133.60/75 per dollar compared with Thursday’s close.
“There is importer demand, while exporters are reluctant to sell (dollars),” said a currency dealer on condition of anonymity.
The spot currency ended steady for the 13th straight session at 132.90/133.20, well within the limits set by the central bank. Central bank officials were not available for comment.
Copyright Reuters, 2015
