COLOMBO: Sri Lankan rupee forwards ended a tad weaker on Monday due to importer dollar demand, while exporters awaited direction from the monetary policy and a supplementary budget later this week, dealers said.
Fears of possible depreciation also kept exporters away from the market, dealers said.
The three-day forwards, which were actively traded, ended a tad weaker at 132.99/133.19 per dollar, compared with Friday's close of 132.95/133.05.
Four-day forwards closed at 133.00/133.20 per dollar, weaker from Friday's close of 132.95/133.05. They fell 0.45 percent last week, market data showed.
"Rupee is weaker with diminishing exporter dollar conversions," a dealer said. "The market is expecting depreciation in the short term with the widening trade balance and in line with global currencies."
The central bank will announce its first monetary policy under the new government on Tuesday and Finance Minister Ravi Karunanayake will announce a supplementary budget on Thursday.
President Maithripala Sirisena had pledged pay hikes for state sector, reduction in the prices of 10 essential goods, and cuts in the cost of living through the budget.
Market players expect the rupee to depreciate to 135 in the near future, either due to a policy decision in the budget or if the central bank stops its intervention, allowing it to fall gradually.
Sirisena, who announced an interim cabinet on Jan. 12, said he would carry out reforms to fight corruption in the 100 days to a parliamentary election.
The market is expecting a flexible exchange rate with more foreign grants under the new government as opposed to the controlled exchange rate regime earlier.
The spot currency was not traded on Monday.
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