August 30, 2016 / 11:55 AM / 3 years ago

Sri Lankan rupee edges up on exporter dlr sales, inward remittances

COLOMBO, Aug 30 (Reuters) - The Sri Lankan rupee ended slightly firmer on Tuesday ahead of a central bank policy meeting later in the day, as exporter dollar sales and inward remittances surpassed importer demand for the greenback, dealers said.

The central bank is expected to keep its key interest rates steady at the monetary policy rate meeting, after raising them by 50 basis points last month, a Reuters poll showed, amid signs of easing inflation and slower private sector credit growth.

The spot rupee ended at 145.55/60 per dollar, edging up from Monday’s close of 145.60/65, while one-week rupee forwards ended at 145.75/80, compared with the previous close of 145.75/85.

“There were exporter (dollar) sales and inward remittances as it’s the salary week. There was also not much of importer demand,” a dealer said, asking not to be named.

Another dealer said the market has priced in the central bank’s expected policy rate decision, which will be announced at 1230 GMT.

Dealers said the central bank was not seen intervening in the market. Officials from the central bank were not available to comment on whether it had stopped giving directions on the spot rate.

The spot rupee is usually managed by the central bank, and market participants use the forward market levels for guidance on the currency.

Dealers said importers are waiting for the rupee to settle amid upward pressure after Sri Lanka sealed its largest syndicated facility by increasing its three-year borrowing to $700 million from a targeted size of up to $500 million.

The central bank has largely not intervened to defend the rupee ever since a dual-tenure sovereign bond issue raised $1.5 billion in July.

Net foreign inflows into government securities jumped 31.4 percent to 302.4 billion rupees ($2.08 billion) through Aug. 24 since the International Monetary Fund approved a three-year, $1.5 billion loan on June 4, according to the latest central bank data. (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Sunil Nair)

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