COLOMBO: Sri Lankan rupee forwards ended weaker on Monday due to importer dollar demand, though moral suasion by the central bank prevented any fall, while political uncertainty weighed on the currency after the president declared snap polls.
The island nation's Health Minister Mithripala Sirisena said on Friday he would contest against President Mahinda Rajapaksa in the Jan. 8 snap presidential poll.
Since the poll announcement six other legislators have defected. Dealers said the rupee is likely to remain weak due to the political uncertainty and rising seasonal imports.
The spot currency ended steady at 131.00 per dollar.
Three-day forwards, or spot next, which fell to 131.40 during the day, ended at 131.25/50, little changed from Friday's close of 131.25/30 per dollar. Dealers said the central bank capped the three-day forwards at 131.25.
The four-day forwards, active due to the central bank's moral suasion, according to dealers, ended at 131.45/60 per dollar, compared with Friday's close of 131.35/40.
They said exporters and banks were reluctant to sell dollars on expectation the currency would weaken further.
Overseas investors net bought 457.8 million rupees worth of government securities for the week ended Nov. 19, but they have sold a net 39.1 billion rupees ($298.5 million) in the eight weeks through Nov. 19, data from the central bank showed.
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