COLOMBO, April 28 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
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
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
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
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)