COLOMBO: Sri Lankan rupee forwards ended weaker on Thursday due to mild importer dollar demand and exporters stayed away hoping for further weakening of currency but the central bank capped the fall.
Four-day forwards, which were actively traded, ended at 132.20/30 per dollar compared with Wednesday's close of 132.10/20. The central bank capped four-day forwards at 132.20 through "moral suasion", dealers said, referring to intervention to prevent volatility.
"The trade was mild, but the pressure is there as the exporters are on the sideline and not selling as they are expecting currency to weaken in line with the regional currencies," a dealer said.
A central bank official at the International Operations Department denied using moral suasion to cap the four-day forwards on Thursday.
Rupee forwards were maintained around 132.00 in December as the central bank defended the currency through moral suasion.
The spot currency or spot next was not traded on Thursday.
Dealers said unusually high imports towards the end of 2014, amid lower interest rates and a stable exchange rate, had pressured the rupee.
The spot currency maintained between 130.00 and 131.75 rupees throughout 2014, with the central bank defending the currency at both ends to ensure a stable exchange rate. It fell 0.3 percent for the year, Thomson Reuters data showed.
Comments
Comments are closed for this article.