COLOMBO Jan 13 The Sri Lankan rupee fell on
Monday from its 2-1/2 month high hit in the previous session as
importer dollar demand outpaced banks' dollar sales, but the
market expects the currency to strengthen.
Dealers said investor sentiment on the currency was positive
because of expected inflows from a $1 billion sovereign bond
issue this week.
The spot rupee ended at 130.68/73, weaker from
Friday's 130.60/70, which was its highest close since Oct. 24.
"Importer demand pulled the currency. But in the latter part
of the day, banks sold dollars expecting bond proceeds to
strengthen the currency," said a dealer.
The rupee is likely to appreciate in the near term due to
inflows from the bond issue, dealers said, but gains would
depend on whether the central bank wanted to buy the inflows to
build up its reserves or increase dollar liquidity in the
The central bank said on Jan. 2 it expected the rupee to
strengthen in the medium term and any direct intervention in the
foreign exchange market would be minimum.
The rupee 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.
Both the stock and foreign exchange markets will be closed
for public holidays on Tuesday and Wednesday. Normal trading
will resume on Thursday.
(Reporting by Ranga Sirilal and Shihar Aneez)