COLOMBO: The Sri Lankan rupee was steady on Friday as inflows from inward remittances offset importer dollar demand, dealers said. The spot rupee was trading at 153.74/80 per dollar at 0539 GMT, compared with Thursday’s close of 153.75/80. “The state (banks) demand is there. But with the month end, there are inward remittances,” a currency dealer said, requesting anonymity. Last week, central bank Governor Indrajith Coomaraswamy said the rupee was still “over-valued” and that the monetary authority was buying dollars to avoid any appreciation.
The banking regulator is compelled to buy dollars from the market to meet a reserves target set by the International Monetary Fund (IMF) under a $1.5 billion, three-year loan programme. Analysts said a port deal approved by the cabinet on Tuesday helped boost sentiment. On Tuesday, Sri Lanka’s cabinet cleared a revised agreement to lease its Chinese-built southern port of Hambantota, after terms of the first pact sparked widespread public anger in the island nation. The investment is expected to be around $1 billion. Sri Lankan shares were 0.11 percent weaker at 6,661.79 as of 0544 GMT. Turnover was 227.3 million rupees ($1.48 million).
