COLOMBO Jan 6 The Sri Lankan rupee traded
steady on Monday in dull trade as a state-run bank bought
dollars to prevent any appreciation in the currency due to
inflows, dealers said.
The spot rupee was trading unchanged at 130.70/75 per
dollar at 0518 GMT compared with Friday's close.
"The rupee will appreciate in the absence of a state bank.
But it is not moving as 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 on Thursday said it expects the rupee to
strengthen in the medium term and its direct intervention in
foreign exchange market would be minimum.
The central bank on Thursday slashed the standing lending
facility rate or reverse repurchase rate by 50 basis points to a
multi-year low of 8 percent, 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.
Sri Lanka issued price guidance on Monday at 6.25 percent
area for an offering of new five-year 144A/Reg S US
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.
At 0549 GMT, Sri Lanka's main stock index was down
0.26 percent, or 15.42 points, at 5,958.38, slipping from its
highest close since Oct. 17.
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anand