Sri Lankan rupee steady in dull trade

COLOMBO, Aug 15 (Reuters) – The Sri Lankan rupee was steady on Monday as dollar sales by exporters were offset by importer demand for the greenback in dull trade, dealers said.

The spot rupee traded steady at 145.50/55 per dollar, little changed from Friday’s close of 145.50/52.

“There is nothing much happening. There have been no big importer demand or large (exporter) bills. Trading is dull today,” a currency dealer said, asking not to be named.

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

Since a $1.5 billion inflow from a dual-tenure sovereign bond issue, the central bank has largely not intervened in the currency market to defend the rupee. Central bank officials were not available for comment.

One-week rupee forwards were at 145.68/73 per dollar, compared with Friday’s close of 145.70/75.

Foreign investors bought a net 66.9 billion rupees ($460.11 million) worth of government securities between April 29 and Aug. 10, central bank data showed.

The central bank on July 28 raised its main interest rates by 50 basis points each in a surprise move aimed at curbing stubbornly high credit growth that is adding to concerns about inflationary pressures.

Last week, the rupee gained as foreign investors sold dollars to buy local shares, expecting better profits from corporates on hopes that a recent rate increase by the country’s central bank would help improve the island nation’s macro-economic outlook.

Meanwhile, Sri Lankan shares were trading firmer, with the benchmark Colombo stock index up 0.18 percent at 6,534.16 at 0605 GMT. Turnover stood at 268.9 million rupees ($1.85 million).

($1 = 145.4500 Sri Lankan rupees)