Rupee steady as inward remittances offset importer dollar demand

REUTERS: The Sri Lankan rupee was steady yesterday as inflows from inward remittances offset importer dollar demand, dealers said. 

The spot rupee was trading at 153.74/80 per dollar at 0539 GMT, compared with Thursday’s close of 153.75/80. 

“The state (banks) demand is there. But with the month end, there are inward remittances,” a currency dealer said, requesting anonymity. 

Last week, Central Bank Governor Indrajith Coomaraswamy said the rupee was still “over-valued” and that the monetary authority was buying dollars to avoid any appreciation.The banking regulator is compelled to buy dollars from the market to meet a reserves target set by the International Monetary Fund (IMF) under a US$1.5 billion, three-year loan programme. 

Analysts said a port deal approved by the Cabinet on Tuesday helped boost sentiment. 

On Tuesday, Sri Lanka’s cabinet cleared a revised agreement to lease its Chinese-built southern port of Hambantota, after terms of the first pact sparked widespread public anger in the island nation. The investment is expected to be around US$1 billion. 

Sri Lankan shares were 0.11 percent weaker at 6,661.79 as of 0544 GMT. Turnover was Rs.227.3 million (US$1.48 million).