COLOMBO: Sri Lankan rupee forwards traded slightly weaker on Friday due to importer dollar demand, while traders awaited the results of open market operations to find clues to interest rate direction, dealers said.
One-week forwards, which were active, traded a tad weaker at 133.45/55 per dollar compared with Thursday's close of 133.40/45.
"Traders and exporters are waiting to see whether the central bank jacks up overnight rates," said a currency dealer.
The spot currency was steady at 132.90/133.10 per dollar for a sixth straight session, keeping to the limits set by the central bank.
Central bank officials were not immediately available for comment.
Market players are worried there could be further depreciation despite Finance Minister Ravi Karunanayake's statement on Wednesday that Sri Lanka would defend the currency and that the country has enough foreign exchange reserves to prevent any further fall, dealers said.
Central Bank Governor Arjuna Mahendran said on Thursday that foreign currency reserves were stable after it spent over $1 billion in January to defend the rupee, and ample dollar inflows would enable it to cover the country's repayments.
Rupee forwards have been falling since Monday after the central bank lifted a 2-cents-per-day premium limit on the currency, dealers said.
The central bank had defended the spot currency at 132.80 since February 6-18, before allowing it to fall 10 cents against the dollar on Feb-19.
The rupee has fallen 1.4 percent this year through February 20 due to higher imports, the central bank said on Tuesday.
The main stock index was down 0.21 percent, or 15 points, at 7,302.44 with a turnover of 905.1 million rupees.
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