COLOMBO, Oct 2 (Reuters) - The Sri Lankan rupee closed slightly firmer on Thursday after hitting an eight-month low in the last session and the stock market rose marginally on bargain-hunting, trader said.
The rupeeclosed slightly up at 108.00/10 per dollar from Tuesday's close of 108.10/20. The currency and stock markets were closed on Wednesday for the Ramazan Festival holiday.
"The rupee came down when a state bank offered at 108. Probably it must be intervention as Central Bank has been collecting dollars and now they must be pumping them to settle the rupee," said a currency dealer asking not to be named.
On Tuesday, the rupee closed at 108.10/20 after touching 108.50 per dollar in the session, its lowest since Jan. 7.
The Central Bank on Thursday sold T-bonds at the same rate of 19.33 percent for a 21-month, 19.22 percent for a 32-month and 19.09 percent a 45-month. See [ID:nCOL347622] and [ID:nCOL354223].
Sales at those rates on Monday had hastened the rupee's fall, dealers had said. But the currency market ignored that today, traders said.
The Colombo All-Share indexrose 0.3 percent or 6.35 points to 2,148.61, recovering from a 16th fall in 17 sessions. The bourse hit 2,145.23 on Aug. 25, 2006.
The bourse fell 11 percent in September alone, and is down around 16 percent so far this year.
"The market picked up slightly on retail buying across the market as the prices have came down during recent sessions," said Vajira Premawardhana, head of research at Lanka Orix Securities.
Leading fixed line operator Sri Lanka Telecomrose 1.2 percent to 42 rupees a share, calculated on a weighted average while conglomerate John Keells Holdings closed 0.58 percent firmer at 87 rupees.
Listed top private lender Commercial Bank of Ceylonup 1.75 percent to 104 rupees a share.No.1 mobile phone operator Dialog Telekom ended flat at 8.00 rupees.
Market turnover was 84.85 million Sri Lankan rupees ($786,000), well below last year's daily average of 400 million rupees.
The interbank lending rate or call money raterose to 19.286 percent, up from Tuesday's 19.278 percent.
Government data showed annual average inflation rose to 23.2 percent in September from 22.6 percent in August, to its highest level on a new index that dates back to 2002.
However, consumer price inflation eased year-on-year to 24.3 percent this month from 24.9 percent in August. In June, it had hit a record on the current index of 28.2 percent due to soaring food and oil prices.
It was the third straight slowdown in consumer price growth since last December, data from the Department of Census and Statistics showed. The latest index was introduced in December. See [ID:nCOL355352]. (Editing by Bryson Hull)
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