Rupee forwards rise as foreign investors buy bonds

REUTERS: Sri Lankan rupee one-week forwards strengthened yesterday as foreign investors sold dollars to buy local bonds, while selling of the greenback by some exporters and banks also supported sentiment. Asian stock markets joined a global rebound as the immediate drag from the Brexit vote began to ebb and investors wagered Central Banks would ultimately ride to the rescue with more stimulus measures.

One-week dollar/rupee forwards, which have been acting as a proxy for the spot rupee, were at 147.50/60 per dollar at 0555 GMT, compared with Tuesday’s close of 147.80/148.00. “Foreigners are selling dollars,” said a currency dealer requesting not to be named. He said it could be for local bond buying. Dealers said the three-day dollar/rupee forwards were not allowed to trade ahead of the quarter-end.

The forwards, known as spot next, ended at 147.65/85 per dollar on Tuesday, compared with Monday’s close of 148.05/25. Spot next, which has acted as proxy for the spot currency since January, indicates the exchange rate for the day following conventional spot settlement. For yesterday’s trade, the spot next settlement takes place five days ahead due to the intervening weekend. The Sri Lankan stock index was 0.26 percent down at 6,291.26 as of 0604 GMT, on a turnover of Rs.224.5 million.