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Sri Lankan rupee firmer on sovereign bond sale

(Reuters) – The Sri Lankan rupee gained on Wednesday as exporters sold dollars on fears that greenback inflows from a $1.5 billion sovereign bond sale would push the local currency higher, dealers said.

Sri Lanka paid less than it had expected to borrow $1.5 billion via a 10-year sovereign bond on Tuesday, with strong orders helping bring down the yield on the issue to 6.85 percent from initial guidance of about 7 percent.

The rupee was at 140.85/95 per dollar at 0808 GMT, rising from Monday’s close of 141.05/15. Both currency and stock markets were closed for a Buddhist religious holiday on Tuesday.

"Import demand was there, but we saw some panic dollar selling in the morning with the sovereign bond sale," a currency dealer said on condition of anonymity.

Rupee forwards also gained between 0.15 and 0.3 percent due to the $1.5 billion sovereign bond sale.

Some dealers said the bond inflows are unlikely to help the currency in the medium term because of the heavy repayment in the near future.
Sri Lanka’s main stock index was up 0.23 percent at 7,099.44 at 0821 GMT. Turnover was 756.7 million rupees. (COLOMBO, Oct 28/2015)

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