Sri Lankan rupee closes steady, but importer dollar demand weighs on mkt
COLOMBO May 2 The Sri Lankan rupee ended steady on Tuesday amid expectations of dollar inflows from a sovereign bond issuance and syndicated loans, although importer demand for the U.S. currency after a long weekend weighed on the market, dealers said.
Sri Lanka expects to raise up to $1.5 billion via a sovereign bond issuance and another $1 billion from two separate syndicated loans.
Rupee forwards were active, with two-week forwards closing at 153.30/35 per dollar, compared with Friday's close of 153.30/40. The markets were closed on Monday for the International Labour day.
"The (importer) demand was there today, after the long weekend, but the rupee traded steady in dull trade with many (investors) waiting for the outcome of the bond sales," a currency dealer said, asking not to be named.
Dealers expect the rupee to stabilise on higher dollar liquidity after the expected inflows.
A government move to double the borrowing limit of development bonds to $3 billion in 2017 is also expected to increase liquidity.
Finance Minister Ravi Karunanayake on Thursday blamed "technical difficulties" for a two-month delay in receiving an around $160 million loan tranche from the IMF and said the disbursement was expected after June 14.
Sri Lanka has seen a rise in foreign inflows into equities and government securities since early this month, with foreign investors buying shares worth a net 13.7 billion rupees in 26 consecutive sessions through Friday.
Foreign investors also net bought government securities worth 908.9 million rupees ($5.98 million) in the week ended April 26, extending the net inflow to 7.2 billion rupees in four consecutive weeks. But they have net sold 57 billion rupees worth of government bonds so far this year. ($1 = 151.9000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)