Rupee ends steady

Reuters: The Sri Lankan rupee ended steady on Monday ahead of the central bank’s January policy rate decision as dollar sales by two private banks helped offset the demand for the greenback from importers, dealers said.

Six of 11 analysts in a Reuters poll had predicted the rates to be unchanged, with the rest expecting a hike.

Markets, however, were generally pricing in no change after the central bank in its previous monetary policy review had raised commercial banks’ statutory reserve ratio by 150 basis points with effect from 16 January.

The private banks might have sold dollars on behalf of the central bank, some dealers said. Officials at the central bank were not available for comments.

The rupee ended flat at 144.00/20 per dollar.

“There was demand for dollars, but two private banks sold dollars in between Rs. 143.90 and 144.00 which prevented the fall,” said a currency dealer, asking not to be named. Commercial banks parked Rs. 60.096 billion ($419.2 million) of surplus liquidity on Monday using the central bank’s deposit facility at 6%, official data showed.