Rupee edges up on dollar sales by foreign bank; stocks up

REUTERS: The Sri Lankan rupee edged up in one-week forwards yesterday, as dollar sales by a foreign bank outpaced mild importer demand for the greenback, while the market waited for a policy statement from the new Central Bank Governor, dealers said. The spot rupee is tightly managed by the Central Bank and market participants use the forward market levels for guidance on the currency. Many dealers said the Central Bank did not intervene for the second straight session since the appointment of the new Central Bank Governor, Indrajith Coomaraswamy.

The rupee in one-week forwards, which have been acting as a proxy for the spot rupee, stood at 147.00/20 per dollar at 0635 GMT, a tad firmer from Monday’s close of 147.10/20. “A foreign bank is selling dollars to buy bonds for foreign investors,” a currency dealer said asking not to be named. “There was neither moral suasion nor intervention by the Central Bank. Everybody is waiting for some direction by the new central bank governor.” On Monday, he pledged to maintain the Central Bank’s independence in decision making and to avoid policies that lead to boom and bust cycles. Both spot rupee and spot-next were not quoted, dealers said.