COLOMBO: Sri Lankan rupee one-week forwards edged down on Wednesday led by dollar demand by importers and foreigners after the recent sharp rise in the local currency due to foreign investor and exporter conversions of the US currency, dealers said.
The spot rupee, which was traded actively for four straight sessions through Monday, was not traded on Wednesday for the second straight session, they said. On Monday, it had closed at 144.85/95 per dollar.
Dollar/rupee forwards, known as one-week forwards and actively traded for the second straight session, were at 145.50/60 per dollar at 0910 GMT, compared with Tuesday's close of 145.30/40.
"The demand (for dollar) is there. Heavy moral suasion prevented spot and spot next trading and it was the one-week forwards which were active," a currency dealer said, asking not to be named.
"We don't know whether it's the importer demand or foreigners booking the capital gain."
Rupee forwards have been appreciating due to inflows from foreign investments into government securities, another currency dealer said.
Dollar/rupee forwards, known as spot next, were quoted at 144.85/90 per dollar, compared with Tuesday's close of 144.90/145.10.
Foreign investors bought a net 8.47 billion rupees ($58.53 million) worth of government bonds in the week ended June 8, central bank data showed.
Spot next, which acts as a proxy for the spot currency, indicates the exchange rate for the day following conventional spot settlement, which is five days ahead for Wednesday's trade.
Dealers said the central bank was intervening in the market to keep the rupee steady.
Central bank officials were not available for comment.
Dealers said they expected the rupee to strengthen further after the IMF approved a three-year, $1.5 billion loan to support the country's economic reform agenda.
The Sri Lankan stock index was down 0.27 percent at 6,500.49 as of 0900 GMT, on a turnover of 242.8 million rupees ($1.68 million).
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