Rupee forwards up; spot trading resumes

Tuesday, 2 June 2015 00:00 - - {{hitsCtrl.values.hits}}

Reuters: Rupee forwards ended firmer on Monday as the spot currency started to trade after the island nation raised nearly $1 billion from Bond sales in the previous week, with the local currency seen holding steady amid further expected inflows.
Sri Lanka raised $650 million on Thursday by selling an International Sovereign Bond at a yield of 6.125 percent and $388 million from development bonds.
The spot rupee started trading as a State bank, through which the Central Bank usually directs the market, sold dollars at 133.90 per dollar, dealers said.
“There were dollars for trade-related transactions, but not for speculative trading,” a dealer said asking not to be named.
He said the pressure on the rupee might ease when expected inflows come in.
Three-month forwards, which were actively traded for the last few weeks in the absence of spot trading, closed at 136.80/137.10, firmer from Friday’s close of 137.80/90.
Finance Minister Ravi Karunanayake on Friday said the country would see further inflow from some international banks, while Central Bank Governor Arjuna Mahendran said the depreciation pressure was due to a stronger dollar.
Dealers said exporters may start selling dollars as inflows from the dollar bond would help boost the rupee.
The Central Bank, with effect from Monday, imposed a 5% penalty on exporters who hold their dollars for more than 90 days, and a monthly 2% thereafter, currency dealers said.
Exporters have been holding dollars without converting them as it has become cheaper for them to manage costs locally with rupee loans in a lower interest rate environment.
The Central Bank has allowed the spot to fall 0.75%, or by Re. 1, since 30 April to account for broad gains in the dollar and rising credit demand in a low rate environment.
Both stock and currency markets will be closed for a Buddhist religious holiday on Tuesday. The markets will resume trading on Wednesday.

Discover Kapruka, the leading online shopping platform in Sri Lanka, where you can conveniently send Gifts and Flowers to your loved ones for any event including Valentine ’s Day. Explore a wide range of popular Shopping Categories on Kapruka, including Toys, Groceries, Electronics, Birthday Cakes, Fruits, Chocolates, Flower Bouquets, Clothing, Watches, Lingerie, Gift Sets and Jewellery. Also if you’re interested in selling with Kapruka, Partner Central by Kapruka is the best solution to start with. Moreover, through Kapruka Global Shop, you can also enjoy the convenience of purchasing products from renowned platforms like Amazon and eBay and have them delivered to Sri Lanka.