Rupee ends steady for 7th straight session

Thursday, 19 February 2015 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee closed flat on Wednesday for the seventh straight session as the Central Bank used moral suasion to defend the currency, which has been under pressure due to tepid dollar demand from importers, dealers said. Pressure on the currency is expected to persist despite the Central Bank’s actions until inflows start to come in, they said. Sri Lanka’s newly-elected Government has said it would borrow up to $1.5 billion through sovereign bonds and $4 billion from the International Monetary Fund (IMF) to restructure expensive loans. The spot currency ended at 132.80/133.00 per dollar, unchanged from Monday’s close. The stock and currency markets were closed on Tuesday for a Hindu religious holiday. “The market is steady as the Central Bank sold dollars at 132.80 for some banks,” said a currency dealer asking not to be named. The Central Bank has been defending the spot currency’s level at 132.80 since 6 February, after it lowered the rate from 132.20 amid depreciation pressure. Central Bank officials were not immediately available for comment. Dealers said trading in most forwards was thin after the Central Bank narrowed the per-day premium to two cents on 9 February from five cents. Finance Minister Ravi Karunanayake said on 9 February that the rupee would be held steady at current levels and “there won’t be any devaluation at all”.

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