The Sri Lankan rupee closed steady as a state-run bank continued to sell dollars at 133.80 for the third day on Thursday, even as the central bank defended currency forwards via moral suasion, dealers said. Currency dealers said hopes the rupee would strengthen on rising inflows was fading as the currency has come under pressure after foreign investors too sold rupee bonds on Thursday.
The spot currency ended unchanged at 133.80. "The state bank continued to sell dollars at 133.80 and there is pressure by foreign bond selling too," a currency dealer said on condition of anonymity. Dealers said the central bank has persuaded banks to keep the spot at current levels, but officials of the banking regulator were not immediately available to comment on it.
The state-run bank cut the spot rupee's level by 10 cents to 133.80 on Tuesday after retaining it at 133.90 during the previous five sessions through Monday. The market expects the rupee to be stable so long as the central bank offers dollars, but its stability will depend on the amount of inflows the country is able to get, currency dealers said. One-week forwards ended steady at 133.95/134.10 per dollar, while actively-traded three-month forwards ended at 135.70/90.
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