COLOMBO: The Sri Lankan rupee traded a tad firmer on Wednesday as inflows from inward remittances outpaced thin importer dollar demand, dealers said. The spot rupee was at 130.55/60 per dollar at 0609 GMT, compared with Tuesday's close of 130.58/64.
"Lack of importer demand was the main reason. There were normal remittances which helped the currency to appreciate," said a currency dealer on condition of anonymity.
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. However, dealers said they are yet to see higher import demand.
Central Bank Governor Ajith Nivard Cabraal told Reuters on Wednesday that the rupee will continue its stable trend throughout this year due to rise in inflows through exports and remittances into the island nation.
The currency has gained 0.36 percent in the last 15 sessions through Wednesday, 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 0617 GMT, Sri Lanka's main stock index was down 0.18 percent, or 10.72 points, at 5,896.92.
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