Rupee steady; state bank dlr sales offset importer demand

REUTERS - The Sri Lankan rupee traded steady yesterday as a state-run bank, through which the Central Bank usually directs the market, sold dollars at a flat rate of 133.75 despite importer demand for the greenback, dealers said.

The rupee traded at 133.75 per dollar at 0655 GMT. The state-owned bank on Thursday raised the currency’s peg against the dollar by 25 cents to allow the exchange rate to depreciate to 133.75.

“There is importer demand and we see little remittances and exporter dollar conversions. So the state bank’s dollar sales help to keep the currency steady,” a currency dealer said. “Everybody is waiting for direction from this month’s election.”

On Monday, the state-owned bank cut the currency’s peg to the dollar by 10 cents to 133.50.

Sri Lankan shares edged up to their highest in more than six months on hopes of political stability after the Aug. 17 parliamentary elections and better earnings in the April-June quarter, brokers said.

 The main stock index was up 0.09 percent at 7,383.75 by 0651 GMT, its highest since Jan. 29, Thomson Reuters data showed.
Turnover stood at Rs. 719.2 million ($5.38 million) in early trade yesterday.

The index gained 6.6 percent in nearly a month through Thursday as investors picked up risky assets on expectation of strong corporate earnings and political stability after the elections.