Sri Lankan five-day rupee forwards edged down on Tuesday due to importer dollar demand ahead of holidays later this week, dealers said, even as the central bank chief said the currency was settling down after a period of high volatility. The forwards, known as spot next and which act as a proxy for the spot currency, ended at 145.35/60 per dollar, weaker from Monday's close of 145.05/145.20. Dealers said trading was dull ahead of the Sinhala-Tamil new year holidays on Wednesday and Thursday.
The spot rupee, which has seen little trading since January 27, was not actively traded on Tuesday as well. The central bank has fixed the spot rupee's trading price at 143.90 through moral suasion, dealers said. Arjuna Mahendran, Governor of Central Bank of Sri Lanka, said the rupee was gradually settling down, with less intervention seen by the banking regulator than in the past.
"You have a gang of operators in this market who try to push the central bank time to time and then we have to push them back and see that they don't speculate excessively and throw the entire economy out of kilter," he told reporters in Colombo. The rupee has been under pressure due to foreign investors exiting government securities and amid the country's economic woes.