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Sri Lankan rupee steady in dull trade; stocks up
April 25, 2014 / 7:01 AM / 4 years ago

Sri Lankan rupee steady in dull trade; stocks up

COLOMBO, April 25 (Reuters) - The Sri Lankan rupee traded steady in dull trade on Friday as thin importer dollar demand offset sales of the greenback by exporters, while dealers expected the local currency to remain stable in the near-term in the absence of a pick-up in private sector credit.

The spot rupee was at 130.60/62 per dollar at 0620 GMT, little changed from Thursday’s close of 130.61/63.

“It is very dull trade and nothing much is happening,” said a currency dealer.

Many dealers said they are surprised by the lower credit demand from the private sector even though key interest rates have been at multi-year lows since January.

The benchmark 91-day treasury bill yield further dropped to its lowest since January 2007, data showed on Wednesday, a day after the central bank kept policy rates steady at multi-year lows.,

Private sector credit grew 4.4 percent year-on-year in February, the slowest since May 2010, latest data from the central bank showed. That compared with growth of 5.2 percent in January this year and 13.3 percent in February 2013.

The central bank, in its monetary policy statement on Tuesday, expressed confidence that private sector credit growth would rebound in the second quarter and push up the pace of economic expansion.

Dealers expect the rupee to trade in a range of 130.60-70 in the near future until credit growth picks up. It has been hovering between 130.55 and 130.70 since March 3, Thomson Reuters data showed, with the central bank intervening to smoothen any sharp volatility.

Sri Lanka’s main stock index was up 0.16 percent, or 9.78 points, at 6,187.91 as of 0626 GMT. The market turnover was at 547.7 million rupees ($4.19 million), with 21.6 million shares traded.

Shares in market heavyweight John Keells Holdings were up 0.17 percent at 237.90 rupees with investors betting on a likely parliamentary approval for the company’s $850 million integrated hotel and casino project.

Vallibel One, which traded flat, got the parliamentary approval on Thursday to invest $300 million in an integrated luxury tourist resort, also including a casino, in the island nation’s proposed exclusive gaming zone. ($1 = 130.6150 Sri Lanka Rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

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