The Sri Lankan rupee ended firmer
on Tuesday (08/08/17), as dollar selling by banks surpassed mild importer
demand for the greenback in dull trade after the long weekend, dealers said. The
rupee has been under pressure after the central bank governor on May 18 said
the bank would allow gradual depreciation of the currency.
The spot rupee traded at
153.20/30 per dollar, compared with Friday's close of 153.35/45. Both stock and
foreign exchange markets were closed on Monday to observe the Buddhist
religious holiday.
The central bank held its policy
rates steady on Thursday and said tightening measures are helping cool
inflation and credit growth, signaling receding concerns about price pressure
as it focuses on supporting an economy hit by extreme weather. Analysts said
the market shrugged off Thursday's policy decision by the central bank as it
was widely expected.
Central Bank Governor Indrajit
Coomaraswamy on Thursday said the bank had expected to purchase 1.2 billion
dollars directly from the market between March and December, and it had already
bought around $1 billion. Coomaraswamy had earlier said the rupee was still
"over-valued", and that the monetary authority was buying dollars to
avoid any appreciation. The banking regulator is compelled to buy dollars from
the market to meet a reserves target set by the International Monetary Fund
(IMF) under a $1.5 billion, three-year loan programme.
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