COLOMBO: The Sri Lankan rupee was steady near its one-year high on Tuesday as dollar sales by banks and exporters were offset by mild importer demand, while two state banks bought the greenback to prevent any sharp appreciation in the local currency.
The two banks, through which the central bank intervenes to direct the market, bought dollars at 130.26 rupees as the central bank allowed a gradual appreciation in the local currency to prevent shocks, dealers said.
The central bank had bought dollars at 130.35 rupees on May 30 and started lowering its buying rate since then, allowing a gradual appreciation.
The rupee was unchanged at 130.26/28 per dollar as of 0529 GMT, its highest since June 28, 2013.
Central bank Governor Ajith Nivard Cabraal told Reuters on June 6 that the rupee was facing some appreciation pressure and the bank was allowing the trend on a gradual basis to let all stakeholders adjust to the changes, without any shocks.
He had said earlier that the central bank would keep intervening in the currency market to prevent a rapid rise in the rupee.
The central bank had absorbed over $400 million as of May 27 this year to prevent a sharp gain, one of the two deputy governors at the bank, Ananda Silva, said on May 28. Dealers said the central bank intervention has prevented gains in the currency and they expect it to face upward pressure until credit growth and imports pick up.
Sri Lanka's main stock index was 0.02 percent, or 1.21 points, weaker at 6,285.82 as of 0555 GMT.
Turnover was 412.2 million rupees ($3.16 million), with 24.2 million shares changing hands.
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