COLOMBO: The Sri Lankan rupee was steady in dull trade on Monday as a state-run bank, through which the central bank usually directs the market, sold dollars at 133.70, but the supply of greenbacks did not meet demand by importers, dealers said.
"The spot is steady as the state bank is selling at 133.70, but the demand (for dollars) is seen as the supply is low," said a currency dealer asking not to be named.
"With the announcement of elections the (dollar) selling might stop a bit and exporters might wait for a longer period."
President Maithripala Sirisena dissolved parliament on Friday in an effort to consolidate power and push through political reforms, ending a months-long deadlock.
The central bank kept key policy rates steady at record lows, as expected, on Friday before the markets opened, and said prospects of improved performance in advanced economies along with low inflation and low market interest rates would benefit local economic activity.
Depreciation pressure on the currency eased, dealers said, after Finance Minister Ravi Karunanayake said last week the spot would climb 3 percent to a two-year high of 130 per dollar in two weeks.
Dealers however said that with the announcement of the elections, the rupee may not reach that level.
Three-month forwards traded at 135.30/50 per dollar at 0520 GMT, weaker from Friday's close of 135.25/35 due to lower dollar supply.
In the stock market, the benchmark index was up 0.35 percent at 7,040.65 by 0629 GMT. Turnover stood at 142 million rupees ($1.06 million).
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