COLOMBO: The Sri Lankan rupee traded steady on Tuesday as two state banks bought dollars from remittances and exporter conversions, dealers said. The spot rupee was at 130.60/65 per dollar at 0740 GMT. The currency has risen 0.34 percent in the last four sessions, Thomson Reuters data showed.
"The market is smooth and we will intervene only when there is high volatility," an official from the central bank's International Operations Department told Reuters.
The central bank on Monday said it bought a significant volume of dollars to keep the currency steady. Dealers said inflows from remittances and exporter conversions helped boost investor sentiment.
"The two state banks bought dollars around 130.60 level. We don't know if the buying was on behalf of the central bank," a currency dealer said.
The market has expected downward pressure to continue ahead of festival import demand in April and due to equity outflows.
However, the depreciation is expected to be mild as the central bank has strong reserves to defend the rupee. Foreign investors have sold a net 5.42 billion rupees in stocks in 16 straight sessions through Monday, but they bought a net 709 million rupees worth of government securities in the week ended Feb. 26.
The rupee has gained about 3.5 percent since it hit a record low of 135.20 on Aug. 28 last year. It lost 2.5 percent in 2013.
At 0755 GMT, Sri Lanka's main stock index was up 0.32 percent, or 18.99 points, at 5,933.00.
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