The Sri Lankan rupee ended firmer on Wednesday as a foreign bank sold dollars on behalf of investors keen to buy local bonds, dealers said, a day after the country's finance minister said the currency would rise on inflows from a sovereign bond issue. Sri Lanka raised $1.5 billion in its first sale of dual-tranche eurobonds on Monday, although at a lower borrowing cost than initially expected, as yield-hungry global investors put in over $5.5 billion in offers.
On Tuesday, Finance Minister Ravi Karunanayake said the rupee would "obviously appreciate" on inflows from the sovereign bond issue, and as other borrowings help increase the country's foreign reserves to $8.3 billion from the current $6 billion. "When we have the appreciative reserves, then the rupee has to appreciate on the other side," Karunanayake told reporters after market hours on Tuesday. Sri Lankan rupee one-week forwards, which have been acting as a proxy for the spot rupee, ended at 146.10/25 per dollar, firmer than Tuesday's close of 146.30/40.
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