Rupee forwards trade steady; foreign investors pick bonds

REUTERS - Sri Lankan rupee forwards were trading steady yesterday on dollar selling by a foreign bank and as bond purchases by foreign investors helped offset demand from importers for the U.S. currency, dealers said.

The dollar/rupee forwards, known as spot next, were steady at 146.75/80 per dollar.
“There were dollar sales by a foreign bank after yesterday’s bond auction. 

We have seen some foreign banks selling dollars yesterday also, probably to buy the bonds,” a currency dealer said, asking not to be named. “Demand (from importers) is also there.”
The market is also waiting for cues from a monetary policy announcement scheduled later in the day, analysts said.

Finance Minister Ravi Karunanayake told parliament on Thursday that Japan will end Sri Lanka more than $3.5 billion, mostly to finance development. On Tuesday, Karunanayake told Reuters that the currency would stabilise in the 146.00 per dollar range in early June after money from an IMF loan flows in.

The Central Bank sold Rs.44.69 billion ($304.84 million) worth bonds at an auction on Thursday. The spot currency did not trade on yesterday.
The spot rupee reference rate has been pegged at 145.75, dealers said. Sri Lanka’s Central Bank had fixed the spot rate at 143.90 per dollar until May 2. Meanwhile, Sri Lanka’s stock market was 0.35 percent weaker at 6,625.19 as of 0657 GMT on a turnover of Rs  294.97 million  ($2.02 million).