COLOMBO: The Sri Lankan rupee ended steady on Tuesday, a day after the central bank kept its key policy rates unchanged and as dollar sales by a private bank helped offset demand for the greenback from importers, dealers said.
The private bank might have sold dollars on behalf of the central bank, some dealers said. Officials at the central bank were not available for comments.
The rupee ended flat at 144.00/20 per dollar.
"The demand (for dollars) is there and the pressure (to depreciate) is there. But the central bank is adopting various measures to control the rupee," said a currency dealer, asking not to be named.
"Exporters are reluctant to sell greenbacks expecting further depreciation in the rupee," the dealer said.
The central bank, as expected, kept its key policy interest rates unchanged after the market closed on Monday, saying the effects of previous adjustments are still trickling down into the economy and expected private sector credit growth to decelerate slowly.
Many dealers said a 150-basis-point increase in commercial banks' statutory reserve ratio with effect from Jan. 16 had not eased the pressure on the currency as expected.
"Rate hikes may also be needed to support the currency, which has weakened significantly since the central bank was forced to abandon the rupee's peg with the U.S. dollar in September," Krystal Tan, Capital Economics' Asia economist said in an investor note.
Commercial banks parked 56.14 billion rupees ($391.5 million) of surplus liquidity on Tuesday using the central bank's deposit facility at 6 percent, official data showed.
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