COLOMBO: The Sri Lankan rupee traded steady on Monday as inward remittances and exporter dollar conversions helped offset demand for the greenback from importers, and dealers expect the local currency to be steady until the nation's budget announcement.
The spot currency was steady at 130.28/30 per dollar by 0600 GMT, unchanged from Friday's close.
"As long as foreign investors are interested in government securities, we see the rupee in an appreciating trend," said a currency dealer on condition of anonymity.
"The weekend local poll results show a hiccup in the government's political stability. As long as investor confidence remain, we do not see any drastic fall in the currency."
A weekend provincial poll results showed President Mahinda Rajapaksa's ruling coalition winning the election with a lower margin while opposition parties had gained grounds.
Moody's Investors Service on Monday said Sri Lanka's currency swap agreement with China is a credit positive for the Sri Lanka because it will bolster its external liquidity position and enhance trade flows between the two countries.
"The swap line will also support Sri Lanka's external liquidity position by facilitating trade with China and ensuring the continuity of foreign inflows," Moody's said in a statement.
Dealers said the rupee would trade at the same level due to lower imports and the central bank's intervention ahead of the 2015 budget announcement scheduled for Nov. 7.
By 0601 GMT, Sri Lanka's share index was up 0.2 percent, or 14.27 points, at 7,249.19, the highest since June 10, 2011.
Turnover stood at 521.4 million rupees ($4 million), with 58.2 million shares changing hands.
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