Sri Lankan rupee slightly firmer on bank dollar sales; stocks down

The Sri Lankan rupee was slightly firmer on Friday as dollar sales by a private bank outpaced demand for the greenback from importers, dealers said.

The rupee was at 143.80/90 per dollar at 0612 GMT, 0.07 percent firmer than Thursday’s close of 143.90/95. It hit a record low of 144.30 on Monday.

“Rupee is trading firmer on bank dollar sales. But it is still under pressure due to import demand. A private bank was selling dollars at 143.80 and that helped the rupee to strengthen,” said a currency dealer on condition of anonymity.

Some dealers said the private bank could have sold dollars on behalf of the central bank. Officials at the central bank were not available for comment.

The central bank, in a move to instill investor confidence, on Monday said it would lift all restrictions on outflows by nationals who send money that is earned in foreign currencies.

Central Bank Governor Arjuna Mahendran last week said the steep fall in the rupee has slowed and currency seems to be stabilising at the current level due to inflows from remittances.

Some analysts expect the rupee to stabilise due to a gradual rise in market interest rates. Yields on 91-day T-bills rose by 14 basis points to a more-than-two-month high at a weekly auction on Wednesday, after the central bank raised the statutory reserve ratio by 150 basis points with effect from Jan. 16.

Sri Lanka’s main stock index was down 0.39 percent, or 26.47 points, at 6,748.80 at 0617 GMT, heading for a fifth straight session of falls. Turnover stood at 200.5 million rupee, Reuters reports.

-Agencies