COLOMBO: Sri Lankan rupee forwards edged up on Thursday as dollar inflows surpassed demand from importers, but dealers said they expected the currency to depreciate in the months to come due to rising imports and slowing dollar inflows.
One-week rupee forwards, which act as a proxy for spot, traded at 144.30/35 per dollar at 0620 GMT, slightly firmer from Wednesday's close of 144.35/40.
Rupee forwards have been active since Jan. 27 as there has been little trading in the spot currency, with banks reluctant to trade below the 144.00 level amid moral suasion by the central bank.
Central bank officials were not immediately available for comment.
"Today there are some inflows. Rupee is trading firmer on dollar sales by a bank due to export proceeds," said a currency dealer asking not to be named.
But dealers expect the rupee to come under pressure due to lack of inflow and picking up of importer demand for the festive season in April.
Sri Lanka needs to pay more than $5 billion in foreign loans including interest payments in 2016, while its reserves were only around $7.3 billion at the end of December, according to central bank data. Dealers said the central bank would not be able to hold the rupee at current levels without strong dollar inflows.
The central bank usually intervenes in times of high volatility though it floated the rupee on Sept. 4.
Sri Lanka's main stock index was 0.55 percent weaker at 6,329.43 at 0624 GMT.
Turnover stood at 120.7 million rupees ($838,777). ($1 = 143.9000 Sri Lankan rupees)
Comments
Comments are closed.