COLOMBO May 5 The Sri Lankan rupee was steady
on Monday as thin importer dollar demand offset exporter dollar
sales, while dealers expect the local currency to be stable in
the near term until private sector credit demand and imports
The spot rupee was at 130.60/65 per dollar by 0714
GMT, unchanged from Friday's close of 130.60/65.
"We do not see much movement in the rupee in the near future
until imports and credit growth pick up," said a currency
"Imports are falling and credit growth is slowing. In these
context, the central bank can defend the currency with its
The latest trade data released by the central bank on Monday
showed imports in February fell 6.2 percent, while exports edged
up 5.4 percent.
Despite a multi-year low interest rate regime, private
sector credit grew 4.4 percent in February from a year earlier,
the slowest expansion since May 2010. That compared with growth
of 5.2 percent in January and 13.3 percent in February 2013.
Dealers said the lack of credit expansion and contraction in
the imports could hit the economic growth unless the government
prop up the expansion through infrastructure funding.
The central bank, in its monetary policy statement last
month, however, 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 130.60-130.70 range
in the near future until credit growth picks up. The currency
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 0.04 percent, or
1.89 points, at 6,250.33 as of 0728 GMT. Turnover was at 1
billion rupees ($7.7 million), with 57.8 million shares traded.
($1 = 130.6250 Sri Lanka Rupees)
(Reporting by Shihar Aneez; Editing by Anand Basu)