Sri Lankan rupee firmer on dollar sales by exporters, banks


COLOMBO, Sept 6 (Reuters) – The Sri Lankan rupee edged up on Tuesday as dollar sales by exporters and banks on behalf of foreign investors to buy government securities helped the currency amid a lack of demand from importers for the greenback, dealers said.

The spot rupee was at 145.43/48 per dollar, slightly firmer compared with Monday’s close of 145.45/50 at 0836 GMT. One-week rupee forwards were at 145.60/70, compared with the previous close of 145.60/65.

“There is some (bank dollar) selling (by foreign investors) to buy bonds as well as some exporter conversions,” a currency dealer said, asking not to be named.

Dealers said seasonal importer demand would pick up from mid-October.

After leaving the key policy rates steady, central bank Governor Indrajith Coomaraswamy said last week that the currency was not under upward pressure as capital inflows had not been of sufficient magnitude to exert such pressure.

The central bank has largely not intervened to defend the rupee ever since a dual-tenure sovereign bond issue raised $1.5 billion in July.

Dealers have said the rupee could appreciate if the central bank does not buy the U.S. dollar from the market since capital inflows into government securities have begun, and also due to $1.5 billion sovereign bond inflows.

Dealers also said the central bank was not seen intervening in the market to defend the currency. Central bank officials were not available for comment.

The spot rupee is usually managed by the central bank, and market participants use the forward market levels for guidance on the currency.

Meanwhile, Sri Lankan shares traded weaker, with the benchmark Colombo stock index slipping 0.09 percent to 6,517.41 as of 0837 GMT. Turnover was at 423.8 million rupees ($2.91 million).

($1 = 145.4000 Sri Lankan rupees)

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