The Sri Lankan rupee ended weaker on Wednesday due to importer dollar demand, dealers said, but the market expected pressure on the currency to ease after the government raised nearly $1 billion via a bond auction. The central bank said after market hours on Tuesday that it had on behalf of the government raised a record $973.25 million through a Sri Lanka Development Bond auction and the inflows were expected on Friday.
Rupee forwards were active, with two-week forwards closing at 152.90/153.10 per dollar, weaker from Tuesday's close of 152.50/75.
One-month forwards ended at 153.75/154.00 per dollar compared with Tuesday's close of 153.20/40.
Foreign investors bought a net 1.87 billion rupees ($12.4 million) worth of government securities in the week ended March 8, recording the second weekly net inflow for the year. They have sold a net 61.89 billion rupees of such instruments so far this year.
"The demand (for dollar) was there. But more than that, there are no sales in the market," a currency dealer said, asking not to be named.
On Tuesday, the central bank reversed a transaction on the two-week rupee forwards that exceeded 152.60 per dollar, dealers said, amid demand for the greenback from importers and for dividend payments.