Rupee edges down on importer dollar demand; stocks up

REUTERS: The Sri Lankan rupee traded slightly weaker yesterday as dollar demand from importers weighed on the local currency, dealers said.
Rupee forwards were active, with spot-next forwards trading at 153.00/10 per dollar, as of 0615 GMT, compared with Thursday’s close of 152.98/153.02.
Spot-next-next forwards were trading at 153.10/20, compared with Thursday’s close of 153.05/10.
“The (dollar) demand is there today as well,” said a currency dealer, requesting anonymity.
“Due to the mid-year reserve targets, we don’t think the Central Bank would intervene in the market unless they see a huge volatility,” said the dealer, adding that the year-end seasonal demand for dollars would start from August.
The rupee has been under pressure after Central Bank Governor Indrajit Coomaraswamy said the bank would allow gradual depreciation of the currency.
The Central Bank has set a target of US$1.2 billion in direct market purchases of dollars to boost the island nation’s reserves this year.
The spot rupee did not trade on Thursday. The Central Bank fixed the spot reference rate at 152.50 on May 5. Foreign investors bought a net Rs.1.37 billion (US$8.98 million) worth of government securities in the week ended June 7. They have sold a net Rs.39.96 billion worth of government bonds so far this year. Sri Lankan shares were up 0.47 percent at 6,726.14, as of 0618 GMT. Turnover stood at Rs.505.3 million (US$3.32 million).