Sri Lanka rupee up on state bank dollar sales

COLOMBO: The Sri Lankan rupee rose from an all-time low in the previous session as a state bank, through which the central bank directs the market, sold dollars to stabilize a panicked market, dealers said.
However, they said the rupee cannot be defended for a long time without strong dollar inflows.
The rupee spot next or one-day forward, which was active in the market in the absence of spot trade, closed at 133.40/60 compared with Wednesday's close of 133.70/134.00.
Spot rupee closed steady at 133.10/30, Thomson Reuters data showed.
The currency hit an all-time low of 135.00/15 per dollar on Wednesday amid panic buying by importers, dealers said, but the central bank governor said the moves were exaggerated by thin volumes and insisted the currency would stabilize soon.
The rupee has been falling since early July as foreign investors have pulled out of Sri Lanka's treasury bonds as US Treasury yields rose on expectations the Federal Reserve will soon begin to taper its massive bond buying program.
The rupee has fallen nearly 5.3 percent since June 7 and nearly 4.4 percent so far this year, after depreciating by around 10 percent in 2012.