REUTERS: The Sri Lankan rupee traded weaker yesterday due to importer dollar demand while the broader market awaited positive news on the International Monetary Fund (IMF) loan and sovereign bond sale, dealers said.
As of 0724 GMT, rupee forwards were active, with two-week forwards trading at 153.40/45 per dollar compared with Friday’s close of 153.10/25.
“We expect the rupee to be in this range during this week and to appreciate once the IMF announces its third tranche and the inflows from the government’s sovereign bond issue,” said a currency dealer who requested anonymity. The IMF is yet to approve the third tranche of a US $ 1.5-billion loan and the market expects the approval to help boost sentiment.
Finance Minister Ravi Karunanayake met the IMF officials in Washington last week.
Dealers said the market was keen on inflows from around US $ 1.5-billion borrowing through a sovereign bond issue. Government officials have said authorities would go for the bond sales “soon”.
The island nation has seen foreign inflows into equities and government securities since early this month.
Foreign investors bought equities worth a net Rs.11.77 billion in the 21 sessions through Friday.
They also net bought government securities worth Rs.4.17 billion in the week ended April 19. However, they have been net sellers to the tune of Rs.58 billion worth of government bonds so far this year.
As of 0751 GMT, Sri Lankan shares were down 0.6 percent at 6,494.34, dropping from a six-month closing high, hit in the previous session.
“This is a typical settling in market. Foreign focus has slightly changed on counters. But foreign buying is continuing,” said Softlogic Stockbrokers Deputy CEO Hussain Gani.