Rupee falls on importer dollar demand; stocks up

REUTERS: The Sri Lankan rupee fell yesterday due to dollar demand from importers, even as a top Central Bank official said proceeds from a sovereign bond issue, which dealers say would lift the local currency, have flowed in.
“Once the money comes in, it is obviously part of our reserves,” Central Bank Deputy Governor Nandalal Weerasinghe told Reuters yesterday, adding the $1.5 billion raised from the bond issue has already come into the country.
Finance Minister Ravi Karunanayake said last week that the rupee would “obviously appreciate” on inflows from Sri Lanka’s first sale of dual-tranche eurobonds.
Sri Lankan rupee one-week forwards, which have been acting as a proxy for the spot rupee, were at 146.75/90 per dollar at 0555 GMT, compared with Monday’s close of 146.70/80.
Markets were closed on Tuesday for a Buddhist religious holiday.
Dealers said dollar demand from importers dragged the currency down.
“Now the Central Bank can intervene a bit more actively since the reserves have gone up. But so far we haven’t seen them intervening,” a currency dealer said, asking not to be named.
The spot rupee and the spot-next, which are rupee forwards settled three days after the spot rupee settlement, were not quoted. Spot-next ended at 146.60/70 per dollar on Monday, weaker than Friday’s close of 146.00/15.
The spot rupee is tightly managed by the Central Bank and market participants use the forward market levels for guidance on the currency.