COLOMBO: Sri Lankan five-day rupee forwards traded steady on Monday as importer dollar demand offset the greenback sales, while a few investors waited for directions after the finance ministry ordered exporters to bring back earnings home, dealers said.
The five-day forwards, which are known as spot next and act as a proxy for the spot currency, were at 146.50/70 per dollar at 0722 GMT as compared with Friday's close of 146.50/60.
Sri Lanka's main stock index was down 0.67 percent at 6,379.49 as of 0658 GMT. Turnover stood at 335.5 million rupees ($2.31 million).
Finance Minister Ravi Karunanayake on Friday ordered exporters to repatriate export earnings held abroad with effect from April 1 to improve foreign exchange inflows to the country.
"The government's order came after repeated failure by exporters to bring down their earnings," said a currency dealer, requesting not to be named.
"First, a few exporters said they were waiting to see the rupee to depreciate to 135 Sri Lankan rupee per dollar. Then, they said 140, and later 145. But they never brought the dollars despite the central bank allowing depreciation."
A few dealers said the move was negative because it could dent investor sentiment.
"Forcing exporters to bring in their earnings is against the good governance principles of the government," an exporter said on condition of anonymity.
"The government should have consulted all exporters instead of discussing it with only top 20 exporters."
Central bank Governor Arjuna Mahendran said last week the monetary authority has been intervening to smoothen volatility in an illiquid market.
The spot rupee, which has barely seen any trading since Jan. 27, was not actively traded on Monday as well.
The rupee has been under pressure as foreign investors have sold government securities amid the country's economic woes, but they have net bought bonds worth 11.7 billion rupees in the last four weeks till April 20, central bank data showed.
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