Sri Lankan rupee tad weaker in dull trade; stocks up
COLOMBO, April 28
COLOMBO, April 28 (Reuters) - The Sri Lankan rupee traded little changed on Monday in light trade as exporter dollar sales offset importer demand for the greenback, while dealers expected the currency to remain stable in the near-term in the absence of a pick-up in private sector credit.
The spot rupee was traded at 130.60/65 per dollar at 0526 GMT, a tad weaker from Friday's close of 130.58/61.
"There was not much of demand, this is the level it has been trading at for the last few weeks. The rupee is under appreciation pressure," said a currency dealer asking not to be named.
Many dealers said they were surprised by the lower credit demand from the private sector even though key interest rates have been at multi-year lows since January.
The benchmark 91-day treasury bill yield further dropped to its lowest since January 2007, data showed on Wednesday, a day after the central bank kept policy rates steady at multi-year lows.,
Private sector credit grew 4.4 percent year-on-year in February, the slowest since May 2010, latest data from the central bank showed. That compared with growth of 5.2 percent in January this year and 13.3 percent in February 2013.
The central bank, in its monetary policy statement last week, expressed confidence that private sector credit growth would rebound in the second quarter and push up the pace of economic expansion.
Dealers expect the rupee to trade in a range of 130.60-70 in the near future until credit growth picks up. It has been hovering between 130.55 and 130.70 since March 3, Thomson Reuters data showed, with the central bank intervening to smoothen any sharp volatility.
Sri Lanka's main stock index was up 0.28 percent, or 17.29 points, at 6,185.10 as of 0533 GMT. The market turnover was at 129.5 million rupees ($991,500), with 5.8 million shares traded.
Shares in large cap share Ceylon Tobacco Company PLC were up 3.24 percent to 1,100 rupees a share ($1 = 130.6150 Sri Lanka Rupees) (Reporting by Ranga Sirilal; Editing by Anupama Dwivedi)