Rupee edges down; state bank dollar sales cap fall

REUTERS: The Sri Lankan rupee ended slightly weaker on Thursday as importer dollar demand surpassed sales of the US currency by exporters and a state-run bank, dealers said.

The spot rupee ended at 145.75/85 per dollar, compared with Wednesday’s close of 145.70/85. One-week forwards closed at 145.90/146.00, compared with the previous close of 145.90/146.05.

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

“Importer demand was there. But a state bank started selling when the rupee hit 145.95 and it sold until 145.70,” said a currency dealer, asking not to be named.

“It was not clear if the state bank sold on behalf of the Central Bank.”

Dealers said seasonal importer demand would pick up from mid-October.

The Central Bank has largely not intervened to defend the rupee ever since a dual-tenure sovereign bond issue raised $ 1.5 billion in July.