COLOMBO: The Sri Lankan spot rupee ended steady for a fourth straight session on Wednesday as the central bank defended it via moral suasion amid persistent downward pressure due to higher imports in a lower interest rate regime.
The central bank raised yields on 91-day and 182-day treasury bills by 4 and 6 basis points, respectively, at a weekly auction on Wednesday after freezing key policy rates at record lows a day earlier.
The spot currency ended steady at 132.90/133.10 per dollar.
One-week forwards, which were active, ended a tad firmer at 133.40/45 per dollar, compared with Tuesday's close of 133.45/55, as banks sold dollars.
"The central bank reprimanded dealers who traded one-week rupee forwards above 133.45 per dollar," said a currency dealer on condition of anonymity.
The central bank said on Wednesday imports jumped 15.9 percent in December 2014 to $1.8 billion. On Tuesday, it left key policy rates steady at record lows for a 13th straight month, as expected, and said inflation could hit near zero in the first quarter and would remain comfortably low in 2015.
On Monday, it lifted a 2-cents-per-day premium limit after lowering it from 5 cents on Feb. 9.
It had defended the spot currency at 132.80 levels since Feb. 6 through Wednesday, before allowing it to fall 10 cents against the dollar on Thursday.
The rupee has fallen 1.4 percent this year through Feb. 20 due to imports, the central bank said on Tuesday.
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