COLOMBO: Sri Lankan rupee forwards closed steady on Tuesday as inflows kept pace with importers' dollar demand, but pressure remained with the one-year rupee premium rising despite a 50-basis-point rate hike by the central bank last week.
One-week rupee forwards, which act as a proxy for spot, ended at 144.60/67 per dollar, nearly unchanged from Friday's close of 144.60/65.
"There were scheduled outflows and the rupee hardly reacted to the policy rate increase," a currency dealer said, asking not to be named.
"It will take some time for the downward pressure on the rupee to ease."
Small-scale banks also got some dollar inflows, another dealer said, which helped curb volatility in the rupee.
Dealers said the one-year rupee premium gained by 50 cents to 8.20/8.80 due to the rate hike as overnight interest rates also rose in tandem with the hike.
With the rate hike, analysts expect imports to slow down and some let-up in foreign investors exiting from government securities, which have been the main reasons for the fall in the rupee.
Commercial banks parked 36.977 billion rupees ($256.61 million) of surplus liquidity on Tuesday, using the central bank's deposit facility at 6.50 percent, official data showed.
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