Spot Rupee ends steady on CB defence

Thursday, 26 February 2015 00:59 - - {{hitsCtrl.values.hits}}

Reuters: The Sri Lankan spot rupee ended steady for a fourth straight session on Wednesday as the Central Bank defended it via moral suasion amid persistent downward pressure due to higher imports in a lower interest rate regime. The Central Bank raised yields on 91-day and 182-day Treasury bills by four and six basis points, respectively, at a weekly auction on Wednesday after freezing key policy rates at record lows a day earlier. The spot currency ended steady at 132.90/133.10 per dollar. One-week forwards, which were active, ended a tad firmer at 133.40/45 per dollar, compared with Tuesday’s close of 133.45/55, as banks sold dollars. “The central bank reprimanded dealers who traded one-week rupee forwards above 133.45 per dollar,” said a currency dealer on condition of anonymity. The Central Bank said on Wednesday imports jumped 15.9% in December 2014 to $1.8 billion. On Tuesday, it 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 Monday, it lifted a two-cents-per-day premium limit after lowering it from five cents on 9 February. It 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.

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