Sri Lanka rupee trades without intervention

Susantha Ratnayake, Chairman, BOI formally presents the Certificate of Registration to Indra Silva, Chairman, Indra Hotels and Resorts Kandy (Pvt) Ltd

Dec 15, 2008 (LBO) – The Sri Lanka rupee traded around 111.45/55 levels after dipping lower to 111.50/60 Monday, while overnight rates edged lower on excess liquidity, dealers said. The rupee closed at 111.30/45 levels Thursday with no intervention and there was no intervention in early trading Monday, dealers said.

Overnight call rate rates dropped from 18.00/50 levels to 15.00/16.00 levels amidst excess liquidity in the market.

The central bank has announced an eight billion rupee repo auction to mop up excess liquidity, dealers said.

The central bank injected a record volume of liquidity Thursday with its treasury bill stock climbing to 120 billion rupees, and turning a short market into excess by around four billion rupees. Sri Lanka has spent about 30 percent of the country’s foreign reserves in the past two months defending a peg with the US dollar.