Rupee ends steady on bank dollar sales; importer demand weighs

REUTERS: The Sri Lankan rupee closed steady yesterday as late importer demand for the greenback offset dollar selling by a state-run bank in early trade, dealers said. One-week rupee forwards, which have been acting as a proxy for the spot rupee, ended steady at 146.20/40 per dollar. The spot rupee is tightly managed by the Central Bank, and market participants use the forward market levels for guidance on the currency.

“The importer demand (for dollars) was there and a state bank sold dollars,” said a currency dealer, asking not to be named. Central Bank officials were not available for comment. Finance Mini s ter Ravi Karunanayake on July 12 said the rupee would “obviously appreciate” on inflows from the country’s first sale of dualtranche eurobonds, while Central Bank Deputy Governor Nandalal Weerasinghe said last week that the US $ 1.5 billion raised from the bond sale had been absorbed into foreign reserves.

The spot rupee was not traded yesterday. Spot-next, which are rupee forwards settled three days after the spot rupee settlement, ended firmer at 145.95/146.05 per dollar, compared with Friday’s close of 146.00/20.