Sri Lankan rupee up on bank dlr sales, c.bank spot rate

COLOMBO, Aug 11 (Reuters) – The Sri Lankan rupee edged up on Thursday as exporter dollar sales by a local bank and downward adjustment of the currency by the central bank were outpaced by importer demand for the U.S. currency, dealers said.

The spot rupee was trading at 145.50/53 per dollar at 0707 GMT, up from Wednesday’s close of 145.58/62.

“There was dollar selling by a local bank and then the central bank brought down the rupee preference rate by 10 cents to 145.50 per dollar from 145.60,” 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 trading at 145.70/75 per dollar, compared with Wednesday’s close of 145.75/80.

Foreign investors bought a net 63.7 billion rupees ($437.5 million) worth of government securities from April 29 through Aug. 3, 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.

The rupee gained last week 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 weaker, with the benchmark Colombo stock index down 0.31 percent at 6,523.76 at 0715 GMT. Turnover stood at 265.6 million Sri Lankan rupees ($1.83 million). ($1 = 145.2000 Sri Lankan rupees)