COLOMBO: The Sri Lankan rupee was steady in dull trade on Monday as mild importer dollar demand was offset by inward remittances and exporter dollar sales ahead of the festival season, dealers said. Rupee forwards <SLKR> were active, with two-week forwards trading steady at 152.45/50 per dollar at 0619 GMT. “There is not much of activity. Market is very quiet as the seasonal importer demand has settled and most of the companies will be shut for the new year by the end of this week,” said a currency dealer who did not wish to be named.
The rupee has been under pressure due to dollar demand to meet increased seasonal imports ahead of the traditional new year that is celebrated on April 13-14, dealers said. The central bank on March 27 raised the spot rupee <LKR=LK> reference rate by 10 cents to 151.70. It had raised the reference rate by 25 cents on March 20. The central bank raised interest rates for the first time in eight months on March 24, saying tighter policy was a precaution against a build-up of inflationary pressures. [nL3N1H11OX] Analysts said the rate hike, a move that was also aimed at easing pressure on the rupee, could help stabilise the domestic currency that has been hurt by rising imports and outflows due to rupee bond sales by foreign investors. Foreign investors net sold government securities worth 950 million rupees ($6.26 million) in the week ended March 29, and they have net sold 64.2 billion rupees of such instruments so far this year. Sri Lankan shares <.CSE> were up 0.17 percent at 6,072.70 as of 0621 GMT. Turnover stood at 824 million rupees ($5.43 million).
