Sri Lankan rupee forwards rose on Thursday as inflows from strong remittances and exporter dollar sales outpaced thin importer demand for the greenback, dealers said.

Actively traded one-week forwards were at 133.48/49 per dollar at 0658 GMT, compared with Wednesday’s close of 133.60/70. Two-week forwards traded at 133.57/61, compared with their previous close of 133.68/72.

“There are remittances and state bank dollar demand was not seen today,’’ said a currency dealer on condition of anonymity.

Dealers said people were converting dollars into rupees ahead of public holidays on April 3, 13, and 14.

They expect the rupee to gain with a pick-up in seasonal inward remittances ahead of the Sinhala-Tamil New Year on April 14.

The central bank through moral suasion prevented the spot rupee from dropping below 132.90/133.20, a limit it set in February.

Central bank officials were not available for comment.

Dealers said the market may wait for more cues on interest rates after T-bill yields fell for a third straight week.

Yields on T-bills fell between 55 basis points and 63 basis points in the last three weekly auctions, though the fall in interest rates is slowing.

The main stock index was up 0.65 percent at 6,961.16, on track for a third straight session of gains after it hit its lowest close since July 24 on Monday.

Turnover was 435.1 million rupees ($3.27 million).

Stockbrokers expect investors to be cautious until the political situation stabilises.

Sri Lankan President Maithripala Sirisena has formed a national government incorporating the main Opposition, in a bid to push through reforms and preserve political stability. ($1 = 132.9000 Sri Lankan rupees)

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