Sri Lanka 1-wk rupee forwards edge down on importer demand


July 1 (Reuters) – Sri Lankan rupee one-week forwards ended slightly weaker on Friday as importer dollar demand surpassed late inward remittances ahead of Ramadan while nervous investors awaited the appointment of a new central bank governor, dealers said.

One-week dollar/rupee forwards, which have been acting as a proxy for the spot rupee, ended at 146.40/60 per dollar, weaker than Thursday’s close of 146.00/30.

“The importer (dollar) demand was there, but there was some inward remittances from the Middle East ahead of Ramadan festival and holidays in the Middle East during latter part of the day which eased the pressure,” said a currency dealer, requesting not to be named.

“Today we didn’t see central bank intervention or moral suasion, may be because there is no governor to determine the exchange rate.”

Deputy Governor Nandalal Weerasinghe told Reuters on Friday that the monetary board will be responsible for the central bank’s daily operations effective immediately, after the previous governor declined to seek reappointment amid a corruption probe.

But some officials indicated that the central bank will be without a chief for some days, which could raise concerns about the impact of an unprecedented leadership vacuum on daily operations. Government sources say disagreement between President Maithripala Sirisena and Prime Minister Ranil Wickremesinghe over the choice of a new governor has delayed the appointment.

Analysts said the appointment could lead to the shake-up of the coalition government and the future of the economy. Dealers said three-day dollar/rupee forwards, known as spot next, ended at 146.30/50 per dollar. It did not trade on Thursday.

Spot next, which has acted as a proxy for the spot currency since January, indicates the exchange rate for the day following conventional spot settlement. For Friday’s trade, the spot next settlement takes place five days ahead due to the intervening weekend.

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