Feb 18 (Reuters) - The Sri Lankan rupee traded steady on Wednesday for the seventh straight session as the central bank via moral suasion defended the currency, which has been under pressure due to tepid dollar demand from importers, dealers said.
Pressure on the currency is expected to persist despite the central bank's actions until inflows start to come in, they said.
Sri Lanka's newly-elected government has said it would borrow up to $1.5 billion through sovereign bonds and $4 billion from the International Monetary Fund (IMF) to restructure expensive loans.
The spot currency was traded at 132.80/133.00 per dollar at 0655 GMT, unchanged from Monday's close.
The stock and currency markets were closed on Tuesday for a Hindu religious holiday.
"Central bank is offering dollars at 132.80 for some banks," said a currency dealer asking not to be named.
The central bank has been defending the spot currency's level at 132.80 since Feb. 6, after it lowered the spot rate to 132.80 from 132.20 amid depreciation pressure.
Central bank officials were not immediately available for comment.
Dealers said trading in most forwards was thin after the central bank narrowed the per-day premium to 2 cents on Feb. 9 from 5 cents.
Finance Minister Ravi Karunanayake said on Feb. 9 that the rupee would be held steady at current levels and "there won't be any devaluation at all".
Karunanayake told Reuters that Sri Lanka would sell up to $1.5 billion of sovereign bonds in the international market soon and is looking to borrow $4 billion from IMF at very cheap rates for balance of payments support.
The main stock index traded 0.15 percent or 11.04 points weaker, at 7,289.71 at 0700 GMT.
The turnover was 465.7 million rupees ($3.51 million).
Pressure on the currency is expected to persist despite the central bank's actions until inflows start to come in, they said.
Sri Lanka's newly-elected government has said it would borrow up to $1.5 billion through sovereign bonds and $4 billion from the International Monetary Fund (IMF) to restructure expensive loans.
The spot currency was traded at 132.80/133.00 per dollar at 0655 GMT, unchanged from Monday's close.
The stock and currency markets were closed on Tuesday for a Hindu religious holiday.
"Central bank is offering dollars at 132.80 for some banks," said a currency dealer asking not to be named.
The central bank has been defending the spot currency's level at 132.80 since Feb. 6, after it lowered the spot rate to 132.80 from 132.20 amid depreciation pressure.
Central bank officials were not immediately available for comment.
Dealers said trading in most forwards was thin after the central bank narrowed the per-day premium to 2 cents on Feb. 9 from 5 cents.
Finance Minister Ravi Karunanayake said on Feb. 9 that the rupee would be held steady at current levels and "there won't be any devaluation at all".
Karunanayake told Reuters that Sri Lanka would sell up to $1.5 billion of sovereign bonds in the international market soon and is looking to borrow $4 billion from IMF at very cheap rates for balance of payments support.
The main stock index traded 0.15 percent or 11.04 points weaker, at 7,289.71 at 0700 GMT.
The turnover was 465.7 million rupees ($3.51 million).
($1 = 132.8000 Sri Lankan rupees)
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)
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