COLOMBO, Aug 1 (Reuters) - The Sri Lankan rupee
bounced slightly from a 10-month low on Thursday, but dealers
said the currency remains vulnerable due to importer dollar
The absence of dollar inflows and exporter sales of the
greenback have also checked any sizable rebound in the rupee.
The rupee was quoted at 131.60/70 at 0510 GMT, firmer from
its Wednesday's close of 131.65/70, its weakest finish since
'The pressure is still there as exporters and the
remittances are holding on,' said a currency dealer on
condition of anonymity.
'The easing of the pressure depends on foreign direct
investment or inflows from remittances or exporter conversions.'
Dealers said that downward pressure on the rupee could
intensify if there were no dollar inflows in short term.
The rupee has fallen around 4 percent since June 7, with
foreign investors pulling out of Sri Lanka's treasury bonds due
to a rise in U.S. treasury yields on expectations of a roll back
by the Federal Reserve of its stimulus programme.
Dealers expect the rupee to move in a 131.50 to 132.00 range
in the short term and continue to depreciate unless the central
bank steps in with monetary tightening measures or significant
dollar inflows come into the country.
The central bank last month said foreign inflows are
expected into government securities and the downward pressure on
the currency would ease.
Sri Lanka's economy is expected to grow at 7.5 percent this
year, higher than the International Monetary Fund's estimate of
6.3 percent and up from last year's 6.4 percent growth.
However, economists say while private sector credit growth
is slowly picking up, it's not sufficient to help the economy
expand by 7.5 percent this year despite the central bank's easy
monetary policy stance since December.
Sri Lanka's main stock index was 0.07 percent, or
4.05 points, firmer at 6,041.27 at 0532 GMT.
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Shri
Keywords: MARKETS SRILANKA/
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