COLOMBO: The Sri Lankan rupee traded steady at a record low on Monday in dull trade as a state-run bank, through which the central bank directs the markets, offered dollars at 114, dealers said.
Central Bank Governor Arjuna Mahendran last week said the country should let market forces determine its rupee exchange rate and warned that trying to buck the global trend of a rising dollar is "suicidal".
The spot currency was steady at 134.00 per dollar on Monday, a record low hit in the previous session on Friday.
"The rupee is steady as the state bank is selling dollars at 134.00," a currency dealer said on condition of anonymity.
Currency dealers said hopes that the rupee would strengthen on rising inflows were fading as the currency had come under pressure due to a strong US currency, political uncertainty ahead of a parliament poll and foreign selling in rupee bonds during the last few days.
The market expects the rupee to be stable as long as the central bank offers dollars, but its stability will depend on inflows into the country, currency dealers said.
Finance Minister Ravi Karunanayake said on Thursday that Sri Lanka is planning to borrow $1 billion via five-year syndicated loans as early as this week from international banks and it could borrow up to $2 billion.
One-week forwards were steady at 134.15/35 per dollar, while three-month forwards were flat at 135.90/136.00.
In the stock market, the benchmark index was up 0.29 percent at 7,081.57 by 0626 GMT. Turnover stood at 581.5 million rupees ($4.34 million).
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