Rupee ends steady in dull trade

Friday, 18 April 2014 03:47 -     - {{hitsCtrl.values.hits}}

Reuters: The Sri Lanka rupee ended steady on Thursday as dollars from a selling bank were bought by a state bank ahead of a long weekend, dealers said. The spot rupee ended at 130.60/65 per dollar. “There was dollar supply from banks’ sales. But a state bank bought them at 130.60, while trading volume was very thin because of the holidays,” a currency dealer said. Both the currency and the stock market will be shut on Friday for a holiday. They were closed on Monday and Tuesday for the Sinhala-Tamil new year and a special bank holiday, respectively. The rupee has been hovering between 130.55 and 130.70 per dollar since March 3, Thomson Reuters data showed. Dealers are citing the central bank’s intervention through two state banks to defend the rupee from sharp swings. There has been a gradual increase since mid-March in remittances by Sri Lankan expatriates to their relatives, while dollar selling has also increased as exporters paid bonuses to their employees. Those inflows have helped ease depreciation pressure, which was there in the early part of the year. Central Bank Governor Ajith Nivard Cabraal said at a Reuters’ Global Market Forum on April 9 that a sharp depreciation or appreciation was unlikely in the rupee, “although a gentle trend could perhaps take place”. Dealers, however, said the rupee could come under downward pressure again in the event of imports picking up in a lower interest rate regime.