Sri Lanka rupee opens weaker

Chief Regulatory Officer at CSE Renuke Wijayawardhane presenting the listing certificate to Executive Chairperson at Renuka Hotels Shibani Thambiayah

Feb 06, 2012 (LBO) – Sri Lanka’s currency opened 20 cents weaker at 114.30 cents against greenback Monday as the monetary authority lowered its intervention rate in forex markets for the second consecutive day, dealers said. In bond markets a 2 two year instrument maturing on March 01, 2014 was quoted around 10.20/35 percent, up from 10.15.25 percent from Friday and 9.775/85 percent levels Thursday, dealers said.

A 3-year bond maturing on March 15, 2012 was quoted around 10.25/50 percent up from around 9.95/10.00 percent levels Thursday, dealers said.

In the call money market overnight rates ranged 9.50 to 9.75 percent and gilt-backed repos traded at 8.50 to 8.75 percent.

The central bank jacked up its reverse repo rate at which money is injected to the market by 50 basis points to 9.0 percent Friday along with a 20 cents weakening of a dollar peg.

The International Monetary Fund, which has halted the last two disbursements of its program calling for more exchange rate flexibility as high credit growth put pressure on Sri Lanka’s currency peg.

The IMF also called for losses in state enterprises, which is also driving up credit, to be contained.