Sri Lankan rupee forwards fall on importer dollar demand
Sri Lankan rupee forwards ended weaker on Monday on dollar demand from importers, but the decline was limited due to moral suasion by the central bank, dealers said.
The dollar/rupee forwards, known as spot next, closed at 146.75/85 per dollar, weaker from Friday’s close of 146.40/50.
“There was importer (dollar) demand,” a currency dealer said, asking not to be named.
The spot next, which acts as a proxy for the spot currency, indicates the exchange rate for the day following the conventional spot settlement, meaning it was three days ahead for Monday’s trade.
The pressure on the local currency is likely to ease, dealers said, on expected fund inflows following a loan deal with the International Monetary Fund (IMF) and a plan to raise $1.5 billion through the sale of a 10-year sovereign bond within the next few days.
Trading in the spot currency however has been intermittent since Jan. 27, and it was barely bid on Monday as well. The spot rupee reference rate was pegged at 145.75, the dealers said.
Sri Lanka’s central bank fixed the spot trading rate at 143.90 per dollar until May 2, dealers said, but officials at the banking regulator were not available for comment on whether it had intervened in the forex market.
Dealers also said the foreign exit from government securities has also reversed and helping the currency.
The government securities held by foreign investors had risen by 11.1 billion rupees ($76.29 million) to 232.7 billion rupees in the week ended on May 11, the latest central bank data showed. ($1 = 145.5000 Sri Lankan rupees)
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