Rupee, stocks little changed; dull trade ahead of long weekend

REUTERS: The Sri Lankan rupee was little changed yesterday, as mild importer demand for the dollar offset light greenback sales by banks in dull trade ahead of the long weekend, dealers said. 

Analysts said the market shrugged off Thursday’s policy decision by the Central Bank as it was widely expected. 

The spot rupee traded at 153.35/45 per dollar at 0626 GMT, compared with Thursday’s close of 153.30/45. 

“It’s a quiet day. We haven’t seen much transactions. There is slight import demand, may be because of the long weekend,” a currency dealer said requesting anonymity. 

The Central Bank held its policy rates steady on Thursday and said past tightenings are helping cool inflation and credit growth, signalling receding concerns about price pressure as it focuses on supporting an economy hit by extreme weather. 

Central Bank Governor Indrajit Coomaraswamy on Thursday said the bank had expected to purchase 1.2 billion dollars directly from the market between March and December. 

Coomaraswamy had earlier 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. 

Sri Lankan shares were steady at 6,569.88, as of 0643 GMT. Turnover was Rs.255.1 million (US$1.66 million). 

Both stock and foreign exchange markets will remain close on Monday for a Buddhist religious holiday.