Sri Lanka's rupee closed firmer on Friday despite heavy importer dollar demand as the central bank narrowed the dollar trading band, running counter to an IMF request to limit intervention in the forex market. The rupee closed firmer at 110.09/110.10 a dollar from Thursday's close of 110.19/20 as the central bank narrowed the trading band by 10 cents to 109.70/110.10 from 109.70/110.20.
"A state bank, through which the central bank directs the market, sold dollars at a flat rate of 110.10 despite heavy importer demand for greenback," a dealer said. The bank on Friday defended its foreign exchange rate policy after the International Monetary Fund asked it to limit its interventions and allow more currency flexibility. After the central bank reduced the range on Friday, rupee premiums came down by 15 cents, currency dealers said. Sri Lanka's main share index closed 0.02 percent or 1.27 points down at 6,990.33. It is the second-best performer in Asia with a return of 5.34 percent on the year after Indonesia.