REUTERS: The Sri Lankan rupee traded weaker yesterday due to dollar demand from importers while moral suasion by the Central Bank prevented a further fall in the currency, dealers said.
The rupee has been under pressure due to rising imports and net selling of government securities by foreign investors, with the Central Bank adjusting the spot rupee reference rate to a record low of 150.15 against the dollar.
Rupee forwards were active yesterday, with two-week forwards trading at 150.90/151.00 per dollar at 0514 GMT, weaker from Wednesday’s close of 150.75/80. One-month forwards were trading at 151.35/45, down from the previous day’s close of 151.25/35.
“The dollar demand is still there. Today, there is moral suasion by the Central Bank, and it is not allowing one-week forwards to trade beyond 150.35 and two-week (forwards) beyond 150.70, but it allowed some small banks to trade below its desired level,” said a currency dealer who declined to be identified.
The spot rupee was quoted around the Central Bank’s reference level of 150.15, dealers said.
Sri Lanka’s Central Bank said it would sell US $225 million worth development bonds, with settlement scheduled on January 23.
Dealers say the market is waiting for the outcome of the bond sale as they expect pressure on the rupee to ease if the Central Bank raises the targeted amount.