Friday, March 23, 2012

Sri Lanka rupee edges up on thin inflows

* Market sees thin trade, low import dlr demand

* Cbank's dlr buying won't help rupee-dealers

* Stx up on market heavyweight John Keells

COLOMBO, March 23 (Reuters) - Sri Lanka's rupee closed a tad firmer on Friday on light inflows from worker remittances and low importer dollar demand a day after the island nation's treasury secretary forecast the currency would strengthen to at least 125, dealers said.

The rupee closed at 130.00/130.10 a dollar, edging up from Thursday's close of 130.10/130.30. It hit a record low of 131.60 on Monday mainly due to importer demand for greenbacks for the upcoming April festive season.

"There were some inward remittances and some export conversions. They wanted to covert when they see that the rupee is stabilising," said a currency dealer on condition of anonymity.

However, many dealers were skeptical of a rupee recovery, since the central bank has been absorbing all the dollars coming into the country to boost its foreign exchange reserves.

The rupee has fallen 12.1 percent since the central bank stopped defending a specific price on Feb. 9.
The stock market rose more 1.36 percent or 72.63 points to hit 5,422.33 ending forth straight session losing streak as investors picked up shares of conglomerate John Keells holding PLC.

Shares in Keells rose 1.94 percent to 194.80 rupees a share.

Analysts also said that many investors remained cautious about interest rates, the rupee and an expected fall in overall company profits.

The day's turnover was 926.9 million rupees ($7.12 million), well below last year's daily average of 2.3 billion. Volume was 39 million. Last year's daily average was a record 102.7 million.

Foreign investors were net sellers of 9.3 million on Friday. But they have been net buyers of 20.1 billion rupees ($154.32 million) worth of shares so far this year, after a net outflow of 19.1 billion last year.

The Colombo bourse is one of the worst performers this year among Asian markets, with a 10.74 percent loss. ($1 = 130.2500 Sri Lanka rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Bryson Hull)

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