COLOMBO: The Sri Lankan rupee traded steady on Thursday on thin trading volumes, while currency forwards traded actively, a day after the central bank governor said the local currency would continue its stable trend for the rest of the year.
Central Bank Governor Ajith Nivard Cabraal said on Wednesday the rupee would be stable throughout this year due to rise in inflows through exports and remittances into the island nation.
The spot rupee was trading at 130.60/65 per dollar at 0613 GMT, little changed from Wednesday's close of 130.60/63.
Some dealers said the three-day forward or spot-next trade was active for deals traded above 130.60 rupees a dollar, a level seen as central bank's desired level for the rupee.
"Spot next is active today for the trades above 130.60.
That suggests that it is the desired level of the central bank. But nobody (from central bank) called yet," said a currency dealer on condition of anonymity. Spot next traded at 130.65/70 per dollar against Wednesday's close of 130.62/65.
Through moral suasion, officials from the central bank directly call commercial banks and traders when they see the rupee volatility is unwarranted.
Contrary to market expectations, the local currency has been gaining ahead of the traditional new year in April.
Usually, the rupee falls in March and early April due to higher import demand ahead of the Sinhala-Tamil new year.
The currency has gained 0.33 percent in the last 16 sessions through Thursday, Thomson Reuters data showed.
It has been on a rising trend since Feb. 27 amid weak demand for dollars from importers, dealers said. Dealers said the rupee was expected to trade in a range of 130.50 to 130.75 in the near term.
At 0618 GMT, Sri Lanka's main stock index was up 0.11 percent, or 6.48 points, at 5,918.53.
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