COLOMBO: The Sri Lankan rupee rose against the dollar on Friday due to exporter dollar sales and the absence of buying from importers, and dealers expect the currency to be stable throughout the year after the central bank chief's comments.
The rupee was traded at 130.16/19 per dollar at 0553 GMT, slightly stronger than Thursday's close of 130.19/22.
There was not much demand from importers and the rupee's appreciating trend was intact, a currency dealer said on condition of anonymity.
Central bank Governor Ajith Nivard Cabraal said at a foreign correspondents forum late on Wednesday that it would intervene in the market to keep the rupee stable. Cabraal said Sri Lanka's foreign exchange market was thin and the intervention was mainly because the central bank did not want the market to get disturbed with a single transaction, "whether an inflow or outflow".
Dealers said the two state banks, through which the central bank usually intervenes in the market, were not actively seen in the market.
The central bank has absorbed $1.09 billion from the market this year through Wednesday, a central bank official said recently, to keep the rupee steady and prevent sharp appreciation as well as excess volatility in the rupee.
Sri Lanka's main stock index was up 0.12 percent, or 8.32 points, at 7,013.07 at 0512 GMT, hovering near three-year highs. Turnover was 1.68 billion rupees ($12.91 million), with 142.2 million shares changing hands.
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