Sri Lankan rupee up; on exporter, foreign investor dollar sales
COLOMBO, June 13 (Reuters) – Sri Lankan rupee forwards rose on Monday as dollar conversions by foreign investors and exporters surpassed importer demand for the greenback amid high foreign buying in local bonds, dealers said.
The spot rupee, which was traded actively for a fourth straight day, also gained, they said.
Dollar/rupee forwards, known as spot next, traded at 144.52/82 per dollar at 0559 GMT, compared with Friday’s close of 145.00/05.
Spot next, which acts as a proxy for the spot currency, indicates the exchange rate for the day following conventional spot settlements, which is three days ahead of Monday’s trade.
Dealers said the spot currency, which on Wednesday started trading actively for the first time since January 18, was active for a fourth day in a row on Monday.
The spot rupee was at 144.50/80 per dollar, compared with Friday’s close of 144.95/145.05.
"There has been a lot of interest in local bond buying by Europeans, mainly from the British, before the Brexit," a currency dealer said, asking not be named.
"We see sudden interest by these British investors. There are some new funds as well."
Foreign investors had bought a net Rs8.47 billion ($58.53 million) worth of government bonds in the week ended on June 8, the latest Central Bank data showed.
Dealers expect the rupee to strengthen further, after the IMF approved a three-year $1.5 billion loan to support the country’s economic reform agenda.
Prime Minister Ranil Wickremesinghe told parliament on Thursday that the government would take measures to abolish the Exchange Control Act, but did not provide a timeframe.
The Sri Lankan stock index was up 0.14 percent at 6,539.87 as of 0624 GMT, on a turnover of Rs 335.2 million ($2.32 million).