The Sri Lankan rupee ended steady on Tuesday as the central bank's moral suasion prevented depreciation ahead of a bond auction to raise $830 million, dealers said. The central bank reversed a transaction on the two-week rupee forwards that exceeded 152.60 per dollar, amid dollar demand from importers and for dividend payments, dealers said.
The market is expecting firm dollar inflows from Sri Lanka Development Bond auction due later in the day. "They (the central bank) asked not to bid the two-week forwards above 152.60. They have reversed a transaction done at 152.75 today," a currency dealer said, asking not to be named.
Central bank officials were not available for comment. Rupee forwards were active, with two-week forwards ending at 152.50/75 per dollar, little changed from Monday's close of 152.50/70. Foreign investors bought a net 1.87 billion rupees ($12.4 million) worth of government securities in the week ended March 8, recording the second weekly net inflow for the year. They have sold a net 61.89 billion rupees of such instruments so far this year.
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