COLOMBO: The Sri Lankan rupee traded at a more than three-week low on Thursday due to importer dollar demand, while the central bank checked the fall by selling the greenback though state banks, dealers said.
Some dealers expect the rupee to face downward pressure due to continued imports and if the United States finds the island nation breaching its sanctions laws after the government spokesman revealed the country had imported Iranian crude via third parties.
The rupee traded weaker at 130.35/40 per dollar at 0652 GMT, its lowest since June 2, from Wednesday's close of 130.34/38. "Rupee is weaker due to the importer dollar demand.
Though importer dollar demand is there, the central bank is not allowing the fall using moral suasion," a currency dealer said asking not to be named.
Two other dealers confirmed the move. Officials at the central bank were not immediately available for comment. Dealers said the currency would trade in a range of 130.40 to 130.50 in the near future due to expected importer dollar demand, but it may gain due to inflows. Currency dealers said it was too early to speculate about the implications of the country breaching US sanctions.
However, it has been a relief for the market so far as nothing has happened on this issue, they added. Sri Lanka's oil import bill could rise if it has to buy more refined oil, dealers said.
Dealers expect the currency to be stable if there is no pressure from the oil import bills due to rising exports and a fall in imports and private-sector credit growth. Sri Lanka's main stock index treaded steady at 0656 GMT.
The turnover was 316.2 million rupees ($2.43 million), with 69.3 million shares changing hands.
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