Sri Lankan rupee steady; under pressure to depreciate

Jan 31, 2017 (Reuters) – The Sri Lankan rupee was steady on Tuesday in dull trade but dealers said the currency was under depreciation pressure with foreign investors exiting government securities.

Rupee forwards were active, with two-week forwards trading at 151.00/10 per dollar at 0524 GMT, unchanged from Monday’s close.

The spot rupee was quoted around the central bank’s revised reference level of 150.25, dealers said.

“There is not much of activities today but the tendency is to weaken with the foreign (investors) selling (government securities),” a currency dealer said, requesting anonymity.

The rupee will also face depreciation pressure due to seasonal importer dollar demand, dealers said.

The rupee has been under pressure due to rising imports and net selling of government securities by foreign investors, while the central bank has said defending the currency was not sensible.

Foreign investors net sold 21.1 billion rupees ($140.6 million) worth of government securities in the three weeks to Jan. 25, according to latest central bank data.

Sri Lankan shares were down 0.07 percent at 6,135.96, as of 0529 GMT. Turnover stood at 61.3 million rupees ($408,394.40).