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Sri Lanka rupee rises on state bank, exporter dollar sales
April 27, 2012 / 11:56 AM / 6 years ago

Sri Lanka rupee rises on state bank, exporter dollar sales

* Rupee gains 0.6 pct; exporters, state bank buy currency

* State bank sells $3 million to support rupee

* Stocks slip on worries about further depreciation

COLOMBO, April 27 (Reuters) - The Sri Lankan rupee ended 0.6 percent firmer on Friday as exporters and a state bank bought the currency a day after the central bank asked the market to step in to help, dealers said.

The rupee ended at 129.90/130.00 against the dollar, up from Thursday’s close of 130.50/131.00, on thin volume, due to lingering depreciation fears.

“Exporters sold dollars, while the market also saw a state bank selling $3 million to the market, which helped the currency to recover,” a currency dealer said on condition of anonymity.

The rupee has recovered 2.7 percent since it hit an all-time low of 133.50 on Wednesday.

On Thursday central bank officials at a meeting with currency dealers had called for an end to speculation that it said had hurt the currency and asked them to try to convince exporters to convert their dollar holdings.

The rupee has depreciated 12 percent since the central bank stopped intervening to defend a specific price on Feb. 9, and 15.1 percent from Nov. 19, when the government allowed a 3 percent devaluation.

The state-owned Bank of Ceylon on Thursday raised $500 million via a five-year bond at the tight end of the 6.875-7 percent guidance.

The central bank said it expected the bond proceeds to support the rupee, but traders were less optimistic.

The stock market edged down 0.08 percent, or 4.49 points, to 5,440.52 with investors worried about the rupee, rising interest rates and slowing economic growth.

The day’s turnover was 778.9 million rupees ($5.95 million), well below this year’s daily average of 1.2 billion rupees.

The market saw a foreign outflow of 44.8 million rupees, but so far this year, foreign investors have been net buyers of 21.3 billion rupees.

The Colombo bourse is one of the worst performing Asian markets this year, losing 10.4 percent. ($1 = 130.8500 Sri Lanka rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Nick Macfie)

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