Spot Rupee steady; CB defends after freezing rates

Wednesday, 25 February 2015 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The Sri Lankan spot rupee ended steady on Tuesday as the Central Bank defended it via moral suasion after keeping key policy rates steady. Currency forwards traded weaker a day after the monetary authority lifted a two-cents-per-day premium limit, dealers said. The spot currency ended steady at 132.90/133.10 per dollar. One-week forwards, which were active, ended weaker at 133.45/55 per dollar compared with Monday’s close of 133.40/45. “One-week (forward) is trading as spot is restricted. Exporters are not converting, expecting the rupee to depreciate,” said a currency dealer asking not to be named. The Central Bank before market open left key policy rates steady at record lows for a 13th straight month, as expected, and said inflation could hit near zero in the first quarter and would remain comfortably low in 2015. On 9 February, the Central Bank lowered the per-day premium to two cents from five cents. Dealers said forwards were actively traded after the Central Bank move. The Central Bank had defended the spot currency at 132.80 levels since 6 February through Wednesday, before allowing it to fall 10 cents against the dollar on Thursday. The rupee has fallen 1.4% this year through 20 February due to imports, the Central Bank said on Tuesday.

Bourse slips from over 1-week high on political woes

Reuters: Sri Lankan stocks ended slightly lower on Tuesday after hitting a more than one-week high in the previous session as political uncertainty weighed on sentiment despite foreign inflows. The main stock index edged down 0.21%, or 15.02 points, to 7,311.29, snapping a three-session winning streak. Ceylon Tobacco Co Plc fell 1.56% with only 55 shares changing hands. Turnover was Rs. 1.25 billion ($ 9.41 million), below this year’s daily average of 1.43 billion rupees. Parliamentary election is expected to be announced after 23 April and there is still uncertainty whether the ruling coalition would contest together or separately. Foreign investors were net buyers of Rs. 434.5 million worth of shares on Tuesday, extending the year-to-date net foreign inflow to Rs. 1.79 billion. The bourse saw a net foreign inflow of Rs. 22.07 billion in 2014. ($ 1 = 132.9000 Sri Lankan rupees)