Rupee closes steady for second straight session

Reuters: The Sri Lankan rupee closed steady for a second straight session on Friday as importer dollar demand was offset by exporter sales of the U.S. currency in the absence of Central Bank intervention, dealers said.

The spot rupee closed unchanged at 146.90/95 per dollar. Rupee forwards were not as active as they were earlier this week.

The spot rupee is usually managed by the Central Bank, and market participants use the forward market levels for guidance on the currency.

“The market was expecting rupee appreciation in the past two days due to exporter dollar sales. But importer dollar demand was equally strong and we did not see any Central Bank directions,” said a currency dealer, asking not to be named.

“It was a dull market and there was not much of active trade.”

Dealers said they expected continued downward pressure on the currency due to a pick-up in seasonal imports through mid-December.

The Central Bank has been buying dollars from the market to accumulate reserves to meet targets set by the International Monetary Fund under a $1.5-billion loan deal, dealers said.

Officials at the Central Bank were not available for comment.