COLOMBO: The Sri Lankan rupee was steady on Friday as banks were reluctant to trade below the central bank's desired level despite importer dollar demand, dealers said.
Traders said the local currency may face pressure as imports continue to rise in a stable exchange rate regime.
The spot currency was flat at 130.90/131.00 per dollar at 0640 GMT. Dealers said they were reluctant to trade the spot below 130.90 due to moral suasion by the central bank at five cents below Wednesday's level of 130.85.
Both the stock and rupee markets were closed for a Buddhist holiday on Thursday.
Three-day forwards, or spot next, which are actively traded because of moral suasion on the spot rupee, were steady at 131.00/05 per dollar.
Dealers said the central bank capped the spot next at 131.00.
"There is importer demand for dollars," a dealer said on condition of anonymity.
"The spot is not allowed to trade below 130.90 and the spot next below 131.00." Central bank officials were not available for comment. The market expects the local currency to remain weak due to rising seasonal imports at least through November and only start to inch up in December on remittances, dealers said.
Overseas investors sold a net 36.2 billion rupees ($276.90 million) worth of government securities in the six weeks through Oct. 29, data from the central bank showed.
Sri Lanka's stock index was up 0.54 percent, or 39.79 points, at 7,398.25 as of 0640 GMT. Turnover was 1.29 billion rupees ($9.86 million), with 34.7 million shares changing hands.
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