Sri Lankan rupee forwards fall in thin trade; stocks down
COLOMBO, May 19 (Reuters) – Sri Lankan one-week rupee forwards fell on Thursday in thin trade as sluggish business activity after floods and landslides dented general business sentiment.
Hopes faded on Thursday for the survival of about 150 people trapped under the mud and rubble of two landslides in Sri Lanka, as heavy rain hampered rescue operations and the death toll from the disaster rose to 41.
The overall damage of the disaster is yet to be assessed.
One-week rupee forwards edged down to 147.05/15 as at 0823 GMT from 146.95/147.00 at close on Wednesday, while the rupee spot next was steady at 146.90/147.00 amid reluctant trade by banks due to moral suasion by the Central Bank, dealers said.
Officials at the Central Bank were not immediately available for comment.
"Since the focus is on the floods and disaster, we see lack of trading as many business firms are not operating under their normal capacity," a currency dealer said, asking not to be named.
Analysts said the market was waiting for some clues from the monetary policy scheduled later on Friday.
Finance Minister Ravi Karunanayake on Tuesday said the currency would stabilise in June after money from an IMF loan flows in, while dealers also expect the pressure to ease on expected fund inflows following the loan deal with the IMF.
Karunanayake told Reuters that the rupee would consolidate in the 146.00 per dollar range with the IMF loan in early June.
Trading in spot currency, however, has been intermittent since January 27. The spot rupee reference rate was pegged at 145.75, dealers said.
Sri Lanka’s Central Bank fixed the spot trading rate at 143.90 per dollar until May 2, they said.
Foreign investors bought more government bonds last week, which also helped the currency, dealers said.
Government securities held by foreign investors rose by Rs11.1 billion ($76.29 million) to Rs232.7 billion in the week ended May 11, latest Central Bank data showed.
Meanwhile, Sri Lanka’s stock market was 0.26 percent down at 6,662.82 as of 0830 GMT on a turnover of Rs1.07 billion ($7.30 million)