REUTERS: The Sri Lankan rupee firmed up yesterday, led by exporter dollar sales and inward remittances but demand from importers for the U.S. currency weighed on sentiment,
Rupee forwards were active, with two-week forwards trading at 152.40/70 per dollar at 0601 GMT, compared with Wednesday’s close of 152.55/65.
“The rupee will ease with the remittances and exporter dollar sales in the coming weeks ahead of the traditional new year in April,” said a currency dealer who did not wish to be named.
Dealers said the rupee has been under pressure due to dollar demand to meet increased seasonal imports ahead of the traditional New Year that is celebrated on April 13-14.
The Central Bank on Monday raised the spot rupee reference rate by 10 cents to 151.70. It raised the reference rate by 25 cents on March 20. On Friday, the Central Bank raised interest rates for the first time in eight months, saying tighter policy was a precaution against a build-up of inflationary pressures.
Analysts said the rate hike, a move that was also aimed at easing pressure on the rupee, could help stabilise the domestic currency that has been hurt by rising imports and outflows due to rupee bond sales by foreign investors.
Foreign investors net bought government securities worth Rs.70 million ($461,285) in the week ended March 22, but they net sold Rs.63.2 billion of such instruments so far this year.
Sri Lankan shares were up 0.15 percent at 6,030.42 as of 0612 GMT. Turnover stood at Rs.895.6 million.