COLOMBO Jan 3 The Sri Lankan rupee ended steady
on Friday after a state bank bought dollars to prevent
appreciation due to inflows, dealers said, a day after the
central bank said it expected the rupee to gain in the medium
The spot rupee closed at 130.70/75 per dollar,
hovering around its highest close since Oct. 25.
"A state bank bought dollars at 130.70 rupees to cap any
appreciation," a currency dealer said on condition of anonymity.
The central bank usually directs the market through two
Revealing its financial and monetary policies for 2014, the
central bank said it expects the rupee to strengthen in
the medium term and its direct intervention in foreign exchange
market would be minimum.
Dealers said the bond market was active after the central
bank slashed the standing lending facility rate or reverse
repurchase rate by 50 basis points to a multi-year low of 8
percent on Thursday, in a move to reduce commercial banks'
interest rate spreads.
Dealers expect the currency to appreciate in the first
quarter of 2014 due to possible dollar bond inflows.
The local currency has gained about 3.4 percent since it hit
a record low of 135.20 on Aug. 28. It lost 2.5 percent in 2013
following a 10.7 percent depreciation in 2012.
(Reporting by Shihar Aneez; Editing by Prateek Chatterjee)