COLOMBO: Sri Lankan rupee forwards traded a tad weaker on Monday due to importer dollar demand and low exporter greenback sales while the market awaited direction from an interim budget later this week, dealers said.
Four-day forwards were actively traded and stood at 132.99/133.15 per dollar by 0627 GMT, little changed from Friday's close of 132.95/133.05.
"The exporters are not converting dollars as they are waiting to see the direction. There are normal imports which put the pressure on the currency," said a currency dealer.
The market is waiting for clarity on the new government's economic policy from an interim budget that Finance Minister Ravi Karunanayake will present on Thursday, dealers said.
President Maithripala Sirisena, who announced an interim cabinet on Jan. 12, said he would carry out reforms to fight corruption.
The market is expecting a flexible exchange rate with more foreign grants under the new government as opposed to the controlled exchange rate regime earlier.
Market players, however, expect the rupee to depreciate to 135 in the near future, either due to a policy decision in the budget or if the central bank stops intervention and allows it to fall gradually.
The spot currency was not traded on Monday. The main stock index was up 0.24 percent or 17.17 points at 7,293.80 at 0653 GMT in thin-volume trade.
Analysts said investors are waiting for direction from the budget amid concerns over political uncertainty as President Sirisena has said he will hold parliamentary elections after April 23.
Turnover was 215.1 million rupees ($1.63 million) by 0655 GMT, exchange data showed.
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