Rupee steady; downward pressure remains

Reuters: The Sri Lankan rupee ended steady on Tuesday as importer dollar demand offset the greenback sales by banks, dealers said.

The rupee ended steady at 141.00/05 per dollar compared with Monday’s close. There was however downward pressure on the rupee due to importer dollar demand, the dealers said.

“There was demand from importers but we have seen some inflows coming into banks,” said a currency dealer who asked not to be named. “The rupee is under pressure on import demand and heavy government spending.”

Dealers said the market shrugged off the central bank’s policy rate decision.

The Sri Lankan economy should grow 6.0-6.5% this year given strong credit growth after keeping the key policy rates steady at record low levels, Central Bank Governor Arjuna Mahendran said on Tuesday.

The rupee hit a record low of 141.40 per dollar on Sept. 28, but recovered slightly after a state-run bank sold dollars.

Commercial banks parked 69.7 billion rupees ($496.1 million) of surplus liquidity using the central bank’s deposit facility, central bank data showed.