COLOMBO: Sri Lankan rupee forwards fell Wednesday on dollar demand from state banks to repay oil bills, with traders saying the local currency may face pressure as imports continue to rise in a stable exchange rate regime.
The spot currency was quoted at 130.90/131.00 per dollar at 0659 GMT compared to Tuesday's close of 130.90/130.98. Dealers said they were hesitant to trade the spot below 130.85, the central bank's desired level for the currency. Three-day forwards, or spot next, which are actively traded in the absence of spot, were flat at 131.00/05 per dollar.
Dealers said since the central bank capped the spot next at 131.00 the four-day forwards have picked up. Four-day forwards were trading lower at 131.02/05, compared to Tuesday's close of 130.95/131.00, dealers said.
"There is importer demand from state banks for oil bills," a dealer said on condition of anonymity. "The spot next was not allowed to trade below 131.00 and the spot next-next (four-day forwards) started to trade."
The market expects the local currency to remain weaker 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 36.2 billion rupees ($276.90 million) worth of government securities in the six weeks through Oct. 29, data from the central bank showed. Sri Lanka's stock index was up 0.24 percent, or 17.63 points, at 7,338.52 as of 0534 GMT.
Turnover was 887.3 million rupees ($6.78 million), with 32.2 million shares changing hands.
Comments
Comments are closed for this article.