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Sri Lanka rupee weaker against greenback on one week forwards

ECONOMYNEXT – Sri Lanka’s rupee was quoted around 188.25/188.50 to the US dollar in one week forwards in intra-day trade but weakened to 189.00/189.50 in late afternoon trade, dealers said with trimmed net open positions contributing to volatility.

There is no active trading in the spot market.

Central bank data on May 05 showed that banks were buying dollars from telegraphic transfers at an average rate of 185.81 rupee and were selling at 191.70 rupees.

The rupee steadied from wildly erratic trading after the central bank intervened to strengthen the peg after printing money, despite weak private credit.

On Thursday the one week dollar slipped as some banks bought dollars, dealers said. The regulator cut net open positions of several banks earlier in April, after printing money, which tends to reduce depth in the market and increase the volatility of the peg.

However with a two month lockdown in place domestic sales of goods and consumption has come down, reducing import demand.

Sri Lanka also slapped import controls and exchange controls as large volumes of money was printed to target call money rates put pressure on the rupee.

In the secondary bond market yields edged up in moderate trading, dealers said with liquidity centered on 2024 maturities.

A bond maturing on 15.12.2021 was quoted at 7.30/45 percent flat from Monday.

A 2-year bond maturing on 01.10.2022 closed at 8.80/8.85 percent up from 8.00/05 percent from yesterday’s close.

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A bond maturing on 01.09.2023 closed at 8.30/40.

A bond maturing on 15.09.2024 closed at 8.73/80 percent on Tuesday up from 8.70/75 percent Thursday.

A bond maturing on 15.10.2027 closed at 9.00/9.10, unchanged from 9.00/9.05 on Monday. (Colombo/May05/2020)