The Sri Lankan rupee ended steady on Monday as dollar sales by a private bank helped maintain the local currency in a dull market amid lower importer dollar demand, dealers said. The rupee closed steady at 143.75/85 per dollar. It hit a record low of 144.30 on January 4. "A private bank was selling dollars in the market, however, very thin trade was witnessed," said a currency dealer, requesting not to be named.
A few dealers said the private bank could have sold dollars on behalf of the central bank as it did not allow the rupee to fall below the range of 143.75/85. Central Bank officials were unavailable for comment. Finance Minister Ravi Karunanayake on Friday said they will look into an approach soon, which should help ease the pressure on the rupee. An unidentified investor has promised to maintain $1 billion in dollar deposits in Sri Lanka, to help the island nation defend its currency, Finance Minister Ravi Karunanayake told Reuters, in an unusual move that highlights the country's precarious finances.
Central Bank Governor Arjuna Mahendran said the steep fall in the rupee has slowed and the currency seems to be stabilising at the current level, due to inflows from remittances. Some analysts expect the rupee to stabilise due to a gradual rise in market interest rates. Yields on 91-day t-bills rose by 14 basis points to an over two-month high at a weekly auction on January 6, after the central bank raised the statutory reserve ratio by 150 basis points with effect from January 16.