Sri Lankan rupee trades steady; state bank buying offsets exporter dollar sales

COLOMBO, Aug 16 (Reuters) – The Sri Lankan rupee was steady on Tuesday as dollar sales by exporters were offset by demand for the U.S. currency by banks, dealers said.

The spot rupee was at 145.50/55 per dollar at 0607 GMT, same as Monday’s close.

“The exporter (dollar) sales are there. But rupee is steady as a state bank is buying (dollars), probably to cover import bills,” 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 145.72/76 per dollar, compared with Monday’s close of 145.72/75.

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.

Meanwhile, Sri Lankan shares were trading firmer, with the benchmark Colombo stock index up 0.13 percent at 6,591.05 as of 0636 GMT. Turnover stood at 447.5 million rupees ($3.08 million). ($1 = 145.4500 Sri Lankan rupees)