Sri Lankan rupee steady in lean trade; stocks weak

COLOMBO, Oct 26 (Reuters) – The Sri Lankan rupee traded steady on Wednesday in a dull market as investors were reluctant to take positions, a day after a state bank sold dollars, capping the fall in the domestic currency amid seasonal importer greenback demand, dealers said.

Dealers said moral suasion by the central bank on Tuesday discouraged trading in the spot currency market.

Rupee forwards were active, with the spot-next trading steady at 147.95/148.10 per dollar at 0653 GMT.

The spot rupee was quoted at 146.90/95 per dollar, but there were hardly any trades.

“It’s the seasonal importer demand, but very dull market after yesterday’s moral suasion and state bank intervention,” 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.

Officials from the central bank were not available for comment.

Dealers also said foreign selling in government securities also put pressure on the currency.

Foreign investors sold 8.79 billion rupees ($59.84 million) worth of government securities in the week ended October 19, data from the central bank showed.

Dealers said the market was waiting for some direction from the national budget due on November 10.

Sri Lankan shares were marginally weak, with the benchmark Colombo stock index 0.07 percent lower at 6,432.71 as of 0655 GMT. Turnover stood at 228.8 million Sri Lankan rupees ($1.55 million). ($1 = 147.7000 Sri Lankan rupees)