REUTERS: The Sri Lankan rupee ended slightly firmer in dull trade yesterday due to inward remittances and exporter dollar sales ahead of the festival season, dealers said.
Rupee forwards were active, with two-week forwards closing at 152.40/45 per dollar, compared with Friday’s close of 152.45/50.
“There was not much activity in the market. The seasonal importer demand has settled and most of the companies will be shut for the new year by the end of this week,” said a currency dealer who did not wish to be named.
The rupee has been under pressure due to dollar demand to meet increased seasonal imports ahead of the traditional new year that is celebrated on April 13-14, dealers said.
The Central Bank on March 27 raised the spot rupee reference rate by 10 cents to 151.70. It had raised the reference rate by 25 cents on March 20.
The Central Bank raised interest rates for the first time in eight months on March 24, saying tighter policy was a precaution against a build-up of inflationary pressures.
Analysts said the rate hike, a move that was also aimed at easing pressure on the rupee, could help stabilise the domestic currency that has been hurt by rising imports and outflows due to rupee bond sales by foreign investors.
Foreign investors net sold government securities worth Rs.950 million in the week ended March 29 and they have net sold Rs.64.2 billion of such instruments so far this year.