Sri Lankan rupee steady; importer dollar demand offsets exporter sales

Oct 14, 2016 (Reuters) – The Sri Lankan rupee traded steady on Friday for a second straight session as dollar demand from importers offset exporter sales of the U.S. currency in the absence of central bank intervention, dealers said.

The spot rupee was steady at 146.90/95 per dollar at 0546 GMT.

Rupee forwards were not as active as they were earlier this week.

The spot rupee is usually managed by the central bank, and market participants use the forward market levels for guidance on the currency.

“The market was expecting a rupee appreciation in the past two days due to exporter dollar sales. But importer dollar demand was equally strong and we did not see any central bank directions,” a currency dealer said, asking not to be named.

However, dealers expect continued downward pressure on the currency due to a pickup in seasonal imports through mid-December.

The rupee posted a 0.4 percent drop last week, following a 0.65 percent loss in the preceding week, Thomson Reuters data showed.

The central bank has been buying dollars from the market to accumulate reserves to meet targets set by the International Monetary Fund under a $1.5-billion loan deal, dealers said.

Officials at the central bank were not available for comment.

Sri Lankan shares were up, with the benchmark Colombo stock index 0.08 percent higher at 6,492.47 as of 0550 GMT. It fell below a key psychological barrier of 6,500 on Thursday. Turnover stood at 51.1 million rupees ($349,115).