Rupee steady near two-month high; forward premiums fall

Wednesday, 25 December 2013 00:00 -     - {{hitsCtrl.values.hits}}

REUTERS: The Sri Lankan rupee traded steady on Tuesday near its two-month closing high amid high inward remittances, while a state-run bank bought dollars to curb any sharp appreciation in the currency, dealers said. However, the rupee’s forward premiums were under pressure after yields in T-bills dropped, traders said. The spot rupee was at Rs. 130.72/75 per dollar at 0751 GMT, near its Monday’s close of 130.70/73, which was the highest close since 25 October. Dealers said one of the two state-run banks, through which the central bank usually directs the market, bought dollars at Rs. 130.70. “Still we are witnessing heavy dollar inflows from inward remittances. A state bank bought dollars to curb sharp appreciation in the rupee,” said a currency dealer. “Forward premiums came down after the yields in T-bills fell at the auction. Both three-month and six-month premiums fell by around 50 cents,” the dealer said. Yields in 91-day and 182-day T-bills dropped 19 basis points (bps) and 34 basis points, respectively, while yield in 364-day t-bill fell 24 bps to their lowest levels since November 2011 at a weekly auction on Wednesday. The rupee has been facing upward pressure since mid-November as expatriates are sending money for their families ahead of Christmas and New Year. The rupee has gained about 3.4% since it hit a record low of Rs. 135.20 on 28 August.