However on Thursday it weakened by 10 Sri Lanka cents (SLC) (over that of Thursday’s close) to be quoted at the Rs. 133.80/133.90 levels in two way quotes in spot interbank trading to the US dollar ($), but held on to those levels the following day Friday with no state intervention to shore it up, a market source told this newspaper.
“The volatility we saw some two to three weeks ago is now missing in the ER,” another said on Thursday.
“It’s stable,” he said.
Meanwhile at the beginning of the week on Monday (July 9) the ER weakened to the Rs. 133.40/133.60 levels in two way quotes in spot interbank trading against the $ as opposed to its previous day’s (July 6) close of Rs. 133.20/133.50(see also the business pages of last week’s The Sunday Leader).
And in the following working day Tuesday (July 10), it again marginally weakened to be quoted at the Rs. 133.70/133.80 level in two way interbank quotes, but held on to those levels the following day Wednesday as well before marginally weakening on Thursday and maintaining that level on Friday, a source said.
In the previous week, cut short to four market days due to the July 3 Poya holiday, the ER in the first three days of trading revolved round the Rs. 133.25-134.00 range in spot, interbank trading, before strengthening to the Rs. 133.20/133.50 levels in two way quotes last Friday (July 6).
This prompted another source to then say at that time, ie on Thursday July 5, that if the ER is able to hold on to those levels (ie at the Rs. 133.25-134.00 range) for another 2-3 weeks, one may ipso facto assume that it will settle down at those prices.
To date, the ER has been holding on at these levels.
“We didn’t see the large scale volatility of the ER, where it used to at times either gain or lose by Rs. two in a day, that week, so if it holds on to these levels for another 2-3 weeks, we may assume that the ER has now settled down at those levels,” he had then said. Another source referring to Monday’s trading said that import demand was slack, while exporters who have had booked forward were seen encashing their foreign exchange ($) proceeds. Central Bank of Sri Lanka in a seeming move to curb the volatility of the rupee has restricted the tenure of forward bookings to 90 days. Tuesday too, due to import pressure, the ER weakened by a marginal 20 SLC over the previous day, the source added, but held on to those levels the following day Wednesday, before retreating by a further 10 SLC on Thursday and holding on to those levels the following day Friday.