COLOMBO: The Sri Lankan spot rupee traded steady in dull trade on Monday as the central bank defended it via moral suasion, while currency forwards traded weaker after the monetary authority lifted a two-cents-per-day limit, dealers said.
The spot currency was traded steady at 132.90/133.10 per dollar at 0720 GMT. Four-day forward, or spot-next-next, was traded at 133.45 per dollar, compared with Friday's close of 133.00/10.
"The spot rupee is flat as nobody is quoting anything above 132.90 under restrictive market conditions. But with the removal of the two-cents-per-day barrier, forwards are trading weaker," said a currency dealer asking not to be named.
On Feb. 9, the central bank lowered the per-day premium to two cents from five cents. Central bank officials were not immediately available for comment.
The central bank had defended the spot currency at 132.80 levels since Feb. 6 through Wednesday, before allowing it to trade 10 cents lower against the dollar on Thursday. Trading in most forwards is thin after the central bank lowered the per-day premium, dealers said.
Finance Minister Ravi Karunanayake said on Feb. 9 that the rupee would be held steady at current levels and "there won't be any devaluation at all", despite downward pressure due to a rise in imports and credit growth amid lower interest rates.
The main stock index was up 0.08 percent, or 6.07 points, at 7,320.98 with a turnover of 547.5 million rupees ($4.11 million)
Comments
Comments are closed for this article.