Rupee firmer on inward remittances, exporter dollar conversions
Wednesday, 18 December 2013 00:00
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REUTERS: The Sri Lankan rupee edged up on Tuesday, despite efforts by a state-run bank to protect it from sharp appreciation, due to high inward remittances and exporter dollar conversions in the absence of demand for the greenback from importers, dealers said.
The spot rupee ended at Rs. 130.80/85 per dollar, firmer from Friday’s close of Rs. 130.85/95. Both foreign exchange and stock markets were closed on Monday for a holiday.
Dealers said one of the two state banks, through which the central bank usually directs the market, bought dollars to curb volatility.
“Unless the state bank bought the dollars, the market would have seen a sharp volatility,” a currency dealer said.
“We do not see any dollar demand from importers until end of this year. So the rupee could only gain unless there are any foreign payments by the Government,” the dealer said.
Central Bank Governor Ajith Nivard Cabraal last week said that the monetary authority would only go in for limited intervention to prevent high volatility in the rupee.
Currency dealers said the rupee was facing upward pressure as expatriates were sending money for their families ahead of Christmas and the New Year.
The rupee has gained 3.3% since it hit a record low of Rs. 135.20 on 28 August.
