The Sri Lankan rupee edged up on Wednesday, helped by inward remittances and as exporter dollar sales outpaced demand for the greenback from importers, dealers said. Some dealers expect the rupee to continue its rising trend due to expected inflows ahead of Christmas and the New Year.

 

The spot rupee was at 130.75/85 per dollar at 0701 GMT compared with Tuesday’s close of 130.80/85.

 

“There was an oil import bill, but the rupee was still on a rising trend because of the inflows, mainly from remittances,” said a currency dealer.

 

“There was no intervention by state banks. But rupee forward premiums came down after the yields in T-bills dropped sharply.”

 

Yields in 91-day and 182-day treasury bills dropped 12 basis points and 29 bps, respectively, at a weekly auction on Wednesday, while 364-day T-bill yield fell 62 bps . All T-bill yields fell to more than two-year lows.

 

Central Bank Governor Ajith Nivard Cabraal last week said that the monetary authority would only go in for limited intervention to prevent high volatility in the rupee.

 

Currency dealers said the rupee was facing upward pressure as expatriates were sending money for their families ahead of Christmas and the New Year.

 

The rupee has gained 3.4 percent since it hit a record low of 135.20 on Aug. 28.

 

At 0708 GMT, Sri Lanka’s main stock index was down 0.01 percent, or 0.84 points, at 5,811.04, Reuters reports.