COLOMBO: Sri Lankan rupee forwards traded a tad weaker on Tuesday due to importer dollar demand, while moral suasion by the central bank prevented a fall in the spot currency, dealers said.
Traders said the local currency was under pressure as imports continue to rise in a stable exchange rate regime.
The spot currency was trading flat at 130.90/131.00 per dollar at 0619 GMT.
Dealers said banks were reluctant to trade the spot below 130.90 due to moral suasion by the central bank.
Three-day forwards, or spot next, which were actively traded, stood at 131.00/05 per dollar compared to Monday's close of 130.98/131.03.
Dealers said the central bank capped the spot next at 131.00 in early trade.
"There is demand (for dollars)," a dealer said on condition of anonymity.
"The spot was not trading below 130.90 and the spot next below 131.00 fearing repercussions." An official at the central bank's International Operations Department said there was not much of trade and moral suasion on Tuesday.
"We have nothing to say now.
We don't see much of trades," said the official on condition of anonymity.
The market expects the local currency to remain weak 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 39.12 billion rupees ($299 million) worth of government securities in the seven weeks through Nov. 5, data from the central bank showed. Sri Lanka's stock index was 0.05 percent, or 3.93 points, weaker at 7,399.45 as of 0623 GMT.
Turnover was 727.3 million rupees ($5.55 million), with 30.7 million shares changing hands.
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