COLOMBO: The Sri Lankan rupee traded steady on Monday as dollar inflows into some government securities offset importer demand for the greenback, while expected inflows in bonds eased the pressure though moral suasion by the central bank prevented a fall, dealers said.
Traders said the local currency may face pressure as imports continue to rise in a stable exchange rate regime.
The spot currency was flat at 130.90/131.00 per dollar at 0629 GMT. Dealers were reluctant to trade the spot below 130.90 due to moral suasion by the central bank.
Three-day forwards, or spot next, which were actively traded because of moral suasion on the spot rupee, were steady at 131.00/131.10 per dollar, compared with Friday's close. Dealers said the central bank capped the spot next at 131.00.
"The rupee is trading flat on the talk of bond (dollar) inflows, but we haven't seen it going through the market yet," a dealer said on condition of anonymity. "The spot is not allowed to trade below 130.90 and the spot next below 131.00."
Central bank officials were not available for comment.
The market expects the local currency to remain weak due to rising seasonal imports at least through November and only start to inch up in December on remittances, dealers said.
Overseas investors sold a net 39.12 billion rupees ($298.97 million) worth of government securities in the seven weeks through Nov. 5, data from the central bank showed.
Sri Lanka's stock index was up 0.09 percent, or 6.99 points, at 7,423.14 as of 0634 GMT.
Turnover was 1.18 billion Sri Lankan rupees ($9.02 million), with 38.9 million shares changing hands.
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