Sri Lanka rupee firmer on dollar sales by banks
COLOMBO, Sept 23
COLOMBO, Sept 23 (Reuters) - The Sri Lankan rupee ended firmer on Monday as dollar sales by banks offset early demand for the greenback from importers, dealers said.
The rupee spot ended firmer at 132.05/10 compared with Friday's close of 132.12/18.
"The sentiment is towards rupee appreciation but exporters are still not convinced to come in and sell. There was not much importer demand," a currency dealer said.
Many dealers expect the rupee to be steady around the 132.00/25 level due to inflows from the National Savings Bank's $750 million 5-year bond issue.
Some dealers noted, however, that the rupee has a tendency to depreciate over the long term without steady dollar inflows from exports and remittances.
The currency hit a record low of 135.20 on Aug. 28, but has recovered since then. It has fallen 3.6 percent this year, after depreciating about 10 percent in 2012.
The rupee has been falling since early July when foreign investors started pulling out of local bonds as U.S. Treasury yields rose in expectation of the U.S. Federal Reserve cutting back its stimulus programme.
Foreign holdings in Sri Lankan government securities hit a more than six-month low last week after falling for four straight weeks.
The central bank did not publish foreign holdings data as of Sept. 18, which is supposed to be provided with the latest weekly indicators. However, an official at the public debt department said they fell 5.47 percent in the four weeks ended Sept. 17 to 475.92 billion rupees ($3.60 billion), the lowest since March 6.
Central bank Governor Ajith Nivard Cabraal said earlier this month that foreign holdings in government securities are still above the maximum 12.5 percent of the total outstanding T-bills and T-bonds that foreigners are allowed to hold. ($1 = 132.2000 Sri Lanka rupees) (Reporting by Ranga Sirilal; Editing by Anupama Dwivedi)
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