Sri Lankan rupee recoups early losses to end steady

Sri Lanka Rupee vs US Dollar

The Sri Lankan rupee ended steady on Thursday as dollar selling by exporters late in the day erased losses due to demand for the greenback from importers earlier, dealers said.

Rupee forwards were active, with one-week forwards closing steady at 148.80/90.

“The (dollar) demand was there, but we saw some export (dollar) conversions in the latter part (of the day),” a currency dealer said, asking not to be named.

The market shrugged off comments by the country’s central bank chief earlier this week on the stability of the currency.

Central Bank of Sri Lanka Governor Indrajit Coomaraswamy said late on Tuesday that he expected the rupee to stabilise once a stake sale in the southern port of Hambantota to a Chinese investor is completed in four to five months.

Coomaraswamy said that proceeds of the $1 billion stake sale would be converted into rupees, easing the strain on the currency that has been under pressure since mid-September due to seasonal demand for U.S. dollars from importers.

Dealers said the currency has also been hit due to selling of government securities by foreign investors.

Foreign investors have net sold 16 billion rupees ($108.40 million) worth of government securities in the two weeks to Oct. 26, data from the central bank showed.