Sri Lanka rupee hits more than 3-month high, ripe for pull back
COLOMBO Oct 25 (Reuters) - The Sri Lankan rupee inched higher to over a three-month high on Friday, spurred by foreign buying in John Keells Holdings' rights issue, though dealers expect the local currency to pull back slightly next week.
Spot rupee was traded at 130.45/55 per dollar at 0535 GMT, its highest close since July 16 and up from Thursday's close of 130.57/60.
Dealers said foreign buying in conglomerate John Keells Holdings has helped boost the currency for much of this week. The company is raising $299 million by selling rights and warrants to fund a $850 million resort project. The deadline to raise the money is Friday.
From next week, with the rights issue out of the way, the rupee could stall, they said.
"The rupee appreciated to these levels because of the Keells rights issue, and now that it's over we might see the rupee coming off a little," a currency dealer said.
Central Bank Governor Ajith Nivard Cabraal told Reuters on Wednesday the rupee was under appreciation pressure and the central bank had been intervening to curb a sharp rise.
On Thursday Cabraal again told Reuters that the central bank was buying dollars. Dealers later confirmed that two state banks, through which the central bank usually directs the market, were seen buying dollars at 130.60 rupees.
The rupee has risen 0.45 percent so far this week, also underpinned by a broadly weaker dollar on expectations the U./S. Federal Reserve will likely delay trimming its bond-buying stimulus to next year.
The rupee hit a record low of 135.20 on Aug. 28, but has managed to stem further losses and has risen 3.53 percent since then.
Sri Lanka's main stock index, was up 0.23 percent, or 13.64 points at 5,950.04, by 0556 GMT. (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Shri Navaratnam)
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