COLOMBO: The Sri Lankan rupee ended near a seven-week low despite pressure due to year-end importer demand as the currency was supported by state banks, dealers said.
The spot rupee ended at 131.20/30 per dollar, hovering around its lowest since Oct. 10, Thomson Reuters data showed. It was weaker than Thursday’s close of 131.20/25.
Three dealers said the spot rupee was not actively traded as it was not allowed to go beyond 131.20 per dollar with state banks selling dollars for selected banks at that level.
The spot was kept steady at 131.10 for three weeks through Monday before it was allowed to trade at 131.15.
With little activity in the rupee spot, three-day forward or spot next was in focus. It was trading slightly firmer at 131.20/30 per dollar from Thursday’s close of 131.30/35, on exporter forward selling.
“Banks don’t trade the rupee, fearing they might get a warning from the regulator as in the past,” a currency dealer said on condition of anonymity.
Central bank Governor Ajith Nivard Cabraal said earlier the monetary authority would intervene to keep the currency stable when there was excess volatility after the rupee hit a seven-week low on importer dollar demand despite intervention by state banks.
The rupee hit a record low of 135.20 on Aug. 28, but has managed to stem further losses and has gained 3.05 percent since then.