Sri Lankan rupee forwards were little changed on Tuesday as demand for dollars from importers increased after a sharp rise in the local currency over the last few days following conversions by foreign investors and exporters, dealers said.
The spot rupee, which was traded actively for four straight sessions through Monday, was not traded on Tuesday, they said.
Dollar/rupee forwards, known as spot next, traded at 144.85/87 per dollar at 0653 GMT, compared with Monday’s close of 144.90/145.00.
“The importer dollar demand is there today. Natural demand has come in as the rupee appreciated during the last few days,” a currency dealer said, asking not be named.
The rupee forwards have been appreciating due to inflows from foreign investments into government securities, another currency dealer said.
Foreign investors bought a net 8.47 billion rupees ($58.53 million) worth of government bonds in the week ended June 8, latest central bank data showed.
Spot next, which acts as a proxy for the spot currency, indicates the exchange rate for the day following conventional spot settlement, which is three days ahead for Tuesday’s trade.
The spot rupee ended at 144.85/95 per dollar on Monday.
Dealers said the central bank was intervening in the market to keep the rupee steady.
Central bank officials were not available for comment.
Dealers say they expect the rupee to strengthen further after the IMF approved a three-year, $1.5 billion loan to support the country’s economic reform agenda.
The Sri Lankan stock index was down 0.09 percent at 6,532.11 as of 0659 GMT, on a turnover of 283.4 million rupees ($1.96 million).
($1 = 144.7500 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Biju Dwarakanath)