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Sri Lanka rupee gains on dollar inflows; cash markets awash

November 03, 2006 (LBO) - The rupee gained against the dollar to hit an intra-day high of 106.

40 Friday, to settle around 106.70 levels, while cash markets also turned liquid on offical capital flows, dealers said. The rupee closed at 107.20 against the dollar Thursday while cash markets turned liquid from rupees generated through an official dollar inflow.

Central bank drained 10 billion rupees from the system via a repo auction at around 10 percent Wednesday, up from 8 billion rupees yesterday.
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A short maturity treasury bill auction was also on offer today to sterilise a further 3 billion rupees.

Interbank call rates also cooled with state banks that are usually short, becoming liquid from official inflows.


Call rates dropped to around 11.5 percent dealers said. Commercial banks have been cashing in on rupee volatility charging wide spreads from customers.

Customers complain that dollars are sold to end users around two to three rupees higher than the interbank rates.


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