Rupee ends steady; forwards edge up after Ravi K comments

Reuters: The Sri Lankan spot rupee ended steady on Monday as a state bank continued to offer dollars at Rs. 133.90, while three-month forwards edged up after the finance minister said the currency would appreciate sharply in the next two weeks, dealers said.

Finance Minister Ravi Karunanayake said on Tuesday that the rupee was set to climb to a two-year high of 130 per dollar from current levels due to ample dollar inflows. The spot rupee ended unchanged at 133.90, while three-month forwards closed little firmer at 135.60 from Monday’s close of 135.74, dealers said. “The government may be trying to use the $ 500 million foreign currency term financing facility to boost the rupee instead of raising the foreign currency reserves,” a currency dealer said on condition of anonymity.

The Government has called on banks and investment houses to propose terms for a foreign currency term financing facility as it seeks to raise up to $ 500 million to meet the costs of some externally-funded projects stated in its 2015 budget.

The rupee has appreciated around 0.2% after hitting a record low of 134.20 on Thursday, with the state bank lowering its dollar selling rate.