Rupee ends steady; state bank dollar sales cap fall

REUTERS: The Sri Lankan rupee ended steady yesterday as a state bank sold dollars after the local currency fell due to importer greenback demand, with traders unwilling to trade the rupee below the level desired by the Central Bank, dealers said. Dealers said the rupee strengthened earlier in the session due to state bank dollar sales. The spot rupee ended at 145.90/146.30 per dollar, little changed from Monday’s close of 145.90/146.00.

“The rupee is under pressure mainly because of lack of (dollar) supply to meet importer demand. A state bank sold when the spot started to trade below 146.00,” said a currency dealer, asking 
not to be named.

The Central Bank’s moral suasion largely prevented spot trades below 146.00, the dealer said.
Rupee forwards, spot-next-next ended at 146.25/35, compared with the previous close of 145.95/146.05.

The spot rupee is usually managed by the Central Bank and market participants use the forward market levels for guidance on the currency.
Dealers had expected seasonal importer demand to pick up from mid-October.
The Central Bank has largely not intervened to defend the rupee ever since a dual-tenure sovereign bond issue raised $1.5 billion in July.