Rupee edges up on dollar sales by exporters, foreigners

REUTERS: The Sri Lankan rupee ended slightly higher yesterday as dollar sales by exporters and foreign investors surpassed purchases by state-run banks, dealers said.
The spot rupee ended at 145.58/62 per dollar, compared with Tuesday’s close of 145.60/65.
The spot rupee is usually managed by the Central Bank, and market participants use the forward market levels for guidance on the currency.
“There was exporter (dollar) selling by local banks and a foreign bank, probably for foreign investors to buy government securities,” a currency dealer said, asking not to be named.
“But the two state banks’ dollar buying prevented the rupee from appreciating.”
Since a US $ 1.5 billion inflow from a dual-tenure sovereign bond issue, the Central Bank has largely not intervened in the currency market to defend the rupee. The Central Bank officials were not available for comment.
One-week rupee forwards ended at 145.75/80 per dollar, compared with Tuesday’s close of 145.80/90.
Foreign investors net bought Rs.63.7 billion worth of government securities from April 29 through August 3, Central Bank data showed.
The Central Bank on July 28 raised its main interest rates by 50 basis points each in a surprise move aimed at curbing stubbornly high credit growth that is adding to concerns about inflationary pressures. The rupee gained last week as foreign investors sold dollars to buy local shares, expecting better profits from corporates on hopes that a recent rate increase by the country’s Central Bank would help improve the island nation’s macro-economic outlook.