Rupee ends steady; Inflows offset by banks’ dollar buying

Thursday, 6 March 2014 00:36 -     - {{hitsCtrl.values.hits}}

REUTERS: The Sri Lankan rupee ended steady on Wednesday in dull trade as inward remittances offset mild importer dollar demand and buying of the greenback by state banks, dealers said. The spot rupee ended flat at Rs. 130.60/65 per dollar. The currency has risen 0.34% in the last five sessions, Thomson Reuters data showed. “The two state banks bought dollars at Rs. 130.60. We are surprised to see the sudden change in the trend,” a currency dealer said on condition of anonymity. The market has been expecting downward pressure to continue ahead of festival import demand in April and due to equity outflows, though the depreciation is expected to be mild as the Central Bank has strong reserves to defend the rupee. However, since Thursday, the rupee is on a gaining trend amid weak demand for dollars from importers, dealers said. The Central Bank said on Monday it bought a significant amount of dollars to keep the currency steady. Foreign investors have sold a net Rs. 5.41 billion worth of stocks in 18 straight sessions through Tuesday, but they bought a net Rs. 709 million worth of government securities in the week ended 26 February. The rupee has gained about 3.5% since it hit a record low of Rs. 135.20 on 28 August last year. It lost 2.5% in 2013.