COLOMBO: Sri Lankan rupee forwards closed slightly weaker on Friday as importer dollar demand outpaced selling of the greenback by exporters and banks, while the local currency was expected to face pressure amid lower interest rates, dealers said.
Actively traded two-month forwards ended at 135.55/60 per dollar, compared with Thursday's close of 135.25/40. One-month forwards ended steady at 134.70/90 per dollar as the central bank defended their levels through moral suasion, dealers said.
"There was importer dollar demand from two private banks. The rupee will be under pressure due to rise in imports in a lower interest rate regime," said a currency dealer asking not to be named.
The market expects the currency to remain under pressure due to higher imports and lower interest rates, dealers said.
The central bank said in a statement on Friday that the rupee had depreciated 1.5 percent against the US dollar through May 5.
On Wednesday, the central bank allowed a 30 cent, or 0.23 percent, fall in the spot rupee to 133.30 per dollar, followed by a 10-cent cut to 133.00 on April 30, until when the spot currency was held at 132.90 since February.
Dealers said the spot rupee did not trade on Friday as well due to moral suasion by the central bank.
The central bank has been keeping the spot rupee and all forwards up to two-month steady through moral suasion. Central bank officials were not available for comment.
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