COLOMBO, April 2 (Reuters) - The Sri Lankan rupee traded
steady for a sixth straight session on Wednesday despite some
importer dollar demand, as banks were reluctant to trade the
local currency beyond 130.70 per dollar due to moral suasion by
the central bank, dealers said.
Dealers, however, expect the currency to gain due to
expected inflows from remittances in early April.
The spot rupee was flat at 130.70/75 per dollar at
The rupee forwards were weaker at 130.77/85 per dollar,
compared with Tuesday's close of 130.73/76. But the pressure on
forwards is expected to ease due to remittances, exporter and
bank dollar sales ahead of the festive season, dealers said.
Dealers said the central bank had asked banks to keep the
rupee at the 130.70-per-dollar level to reduce volatility.
On Monday, Nandalal Weerasinghe, one of the central bank's
deputy governors, told Reuters that the central bank has not
changed its policy of not targeting any specific rate but moral
suasion is one of the instruments many central banks use to
manage short-term volatility.
Dealers expect the rupee to appreciate from early April,
with a dip in importer dollar demand and a rise in inward
remittances before the traditional Sinhala-Tamil new year.
Central bank Governor Ajith Nivard Cabraal said on March 19
that the rupee would be stable throughout this year due to
increasing inflows from exports and remittances.
Dealers said lack of credit demand for imports will help
reduce downward pressure on the rupee.
The currency gained 0.25 percent since Feb. 27, but has
fallen 0.08 percent so far this year, Thomson Reuters data
At 0525 GMT, Sri Lanka's main stock index was up 0.14
percent, or 8.32 points, at 6,010.15.
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil