Sri Lankan spot rupee steady; central bank defends after freezing rates

24 Feb, 2015

COLOMBO: The Sri Lankan spot rupee was unchanged in dull trade on Tuesday as the central bank defended it via moral suasion after keeping key policy rates steady.

Currency forwards traded weaker a day after the monetary authority lifted a 2-cents-per-day premium limit, dealers said.

The spot currency was trading steady at 132.90/133.10 per dollar at 0459 GMT compared to Monday's close.

One-week forwards, which were active, traded at 133.45/55 per dollar compared with Monday's close of 133.40/45.

The central bank before market open left key policy rates steady at record lows for a 13th straight month, as expected, and said inflation could hit near zero in the first quarter and would remain comfortably low in 2015.

On Feb. 9, the central bank lowered the per-day premium to 2 cents from 5 cents. Central bank officials were not immediately available for comment.

Dealers said forwards were actively traded after the central bank move.

The central bank had defended the spot currency at 132.80 levels since Feb. 6 through Wednesday, before allowing it to fall 10 cents against the dollar on Thursday.

The main stock index was up 0.11 percent, or 8.10 points, at 7,334.41 with a turnover of 173.7 million rupees ($1.31 million).

Copyright Reuters, 2015

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