COLOMBO: The Sri Lankan rupee traded steady on Monday in light trade as importer dollar demand was offset by dollar sales from banks, dealers said. The spot rupee was at 130.62/68 per dollar as of 0627 GMT compared with Friday's close of 130.62/65. Contrary to market expectations, the local currency has been on the rise ahead of the traditional new year in April. Usually, the rupee falls in March and early April due to higher import demand ahead of the Sinhala-Tamil new year. Central Bank Governor Ajith Nivard Cabraal said on Wednesday that the rupee would be stable throughout this year due to rise in inflows through exports and remittances into the island nation. He said the reason behind the unusual gain in the local currency was due to higher remittances and improved exports earnings in the past few months. The central bank said on Friday January trade deficit contracted 5.9 percent year-on-year to $756 million. Sri Lanka kept its policy rates steady at multi-year lows on Friday, as expected, as it hopes that slowing private sector credit expansion will rebound and push up the country's growth pace. Dealers said lack of credit demand for imports will help reduce downward pressure on the rupee. The currency gained 0.32 percent in the 17 sessions through Friday, Thomson Reuters data showed. It has been on a rising trend since Feb. 27 amid weak demand for dollars from importers, dealers said. Dealers said the rupee was expected to trade in a range of 130.50 to 130.75 in the near term. At 0631 GMT, Sri Lanka's main stock index was down 0.07 percent, or 4.29 points, at 5,933.58.

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