COLOMBO Jan 8 The Sri Lankan rupee ended
unchanged on Wednesday despite dollar demand from importers and
foreigners who sold rupee bonds as a state bank sold the
greenback to prevent fall in the local currency, dealers said.
The spot rupee ended 130.80/90 per dollar, unchanged
from Tuesday's close.
The local currency fell 0.1 percent on Tuesday on foreign
sales in rupee bonds despite being under pressure to gain due to
expected $1 billion in inflows from a sovereign bond.
Dealers said one of the two state banks, through which the
central bank directs the market, sold dollars at 130.80 after
the local currency faced downward pressure when foreigners
bought dollars to exit rupee bonds.
They said the rupee is under pressure to appreciate in the
near future, but by how much would depend on what the central
bank wanted to do -- whether to buy the inflows to build up its
reserves or increase dollar liquidity in the market.
A source close to the sovereign bond deal said the inflows
are expected next week.
Sri Lanka sold a $1 billion, five-year sovereign bond at par
to yield 6.00 percent.
The central bank on Thursday, while revealing its financial
and monetary policies for 2014, said it expected the rupee to
strengthen in the medium term and its direct intervention in the
foreign exchange market would be minimum.
The local currency has gained about 3.3 percent since it hit
a record low of 135.20 on Aug. 28. It lost 2.5 percent in 2013.
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by