COLOMBO, Nov 7 (Reuters) - The Sri Lankan rupee was steady in thin trade on Thursday, hovering around its four-week closing low, as year-end seasonal importer demand was offset by exporter dollar conversions, dealers said.
The spot rupee was at 131.05/15 per dollar at 0701 GMT, almost steady from Wednesday's close of 131.07/15, its lowest since Oct. 8.
'It's a dull market. Nobody is buying dollars beyond 131.05 rupees, a level indicated by state banks,' a dealer said on condition of anonymity.
Dealers said trade in spot rupee was dull and importers and some foreign banks bought dollars through cash and rupee forwards.
Central bank Governor Ajith Nivard Cabraal told Reuters the bank had not imposed any limits in rupee trading on Thursday.
Dealers expect the rupee to be under downward pressure due to year-end importer demand for the greenback until mid-December. It could then reverse the trend due to expected inflows from foreign remittances by Sri Lankan expatriates during the festive season.
Analysts said the currency was in a falling trend in the long term due to lack of foreign inflows from exports and foreign direct investments and the dollars keeping the rupee steady were mainly from external borrowing.
Cabraal on Friday said the rupee could come under pressure due to importer dollar demand, for consumer-related goods ahead of the December festival season, but the market could manage the demand 'itself without much intervention'.
The rupee hit a record low of 135.20 on Aug. 28, but has managed to stem further losses and is up 3.14 percent since then.
At 0712 GMT, Sri Lanka's main stock index was down about 0.53 percent or 31.06 points at 5,5875.12, its lowest since Oct. 8.
Stockbrokers said expected sluggish growth in September quarter earnings has dented the sentiment. A raft of listed firms are expected to release their quarterly earnings during this month.
(Reporting by Shihar Aneez and Ranga Sirilal; Editing by Anupama Dwivedi) Keywords: MARKETS SRILANKA RUPEE/
(email@example.com)(+94-11-232-5540)(Reuters Messaging: firstname.lastname@example.org)(twitter.com/rangab a)
Copyright Thomson Reuters 2013. All rights reserved.
The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.