Rupee forwards firm up as foreign investors pick bonds

Friday, 20 May 2016 01:00 - - {{hitsCtrl.values.hits}}

Reuters: Sri Lankan rupee forwards closed firmer on Thursday as bond buying by foreign investors helped dollar inflows which eased pressure on the currency, dealers said.

The dollar/rupee forwards, known as spot next, ended at 146.75/80 per dollar, gaining from Wednesday’s close of 146.90/147.00.

“There were dollar sales by two foreign banks after the bond auction. Many foreign investors seem to have bought bonds,” a currency dealer said, asking not to be named.

The market is also waiting for cues from a monetary policy announcement scheduled for Friday, analysts said.

The Central Bank sold Rs. 44.69 billion ($304.84 million)at an auction on Thursday.

The spot rupee was not traded on moral suasion by the Central Bank and the market switched to one-week rupee forwards, which fell in early trade.

Officials at the Central Bank were not immediately available for comment.

Sluggish business activity due to floods and landslides dented sentiment as hopes of survival of about 150 people trapped under mud and rubble faded as heavy rain hampered rescue and as the death toll rose to 43.

Finance Minister Ravi Karunanayake said on Tuesday the currency would stabilise in June after money from an IMF loan flows in.

Karunanayake said the rupee would consolidate in the 146.00 per dollar range in early June.

The spot rupee reference rate was pegged at 145.75 on 2 May, the dealers said. Until then, Sri Lanka’s Central Bank had fixed the spot trading rate at 143.90 per dollar.