Sri Lanka rupee falls from 2-1/2 mth high on importer dlr demand

The Sri Lankan rupee fell on Monday from its 2-1/2-month high hit in the previous session on importer dollar demand.

However, investor sentiment was positive because of expected inflows from a $1 billion sovereign bond issue this week, dealers said.

The spot rupee was at 130.70/75 per dollar at 0731 GMT, weaker from Friday’s close of 130.60/70, its highest close since Oct. 24.

“There were some import bills which put pressure on the currency,” said a dealer.

The rupee is likely to appreciate in the near term due to inflows from the bond issue, dealers said, but gains would depend on whether the central bank wanted to buy the inflows to build up its reserves or increase dollar liquidity in the market.

The central bank said on Jan. 2 it expected the rupee to strengthen in the medium term and any direct intervention in the foreign exchange market would be minimum.

The rupee has gained about 3.4 percent since it hit a record low of 135.20 on Aug. 28. It lost 2.5 percent in 2013.

At 0732 GMT, Sri Lanka’s main stock index was up 0.49 percent, or 29.94 points, at 6,113.08, the highest since Aug. 22. (Reuters)