COLOMBO: The Sri Lankan rupee edged up for a second straight session on Wednesday, helped by bank dollar sales to cover tight rupee liquidity despite demand for the greenback from importers and foreigners, who have been selling treasury bonds, dealers said.
The rupee was quoted at 131.48/55 at 0519 GMT, up from Tuesday's close of 131.60/65. It hit a 10-month low of 131.60/70 on Friday.
"The rupee is firmer as banks are selling dollars due to rupee liquidity shortfall," said a currency dealer. But the two state banks are buying dollars at 131.48 and some bond flows were also seen, the dealer added.
The rupee has fallen 4 percent since June 7, with foreign investors pulling out of Sri Lanka's treasury bonds due to a rise in US treasury yields on expectations of a scaling back by the Federal Reserve of its stimulus programme.
Dealers said the rupee would move in a range of 131.50 to 132.00 in the short term and would continue to depreciate unless the central bank steps in with monetary tightening measures.
The central bank kept its key policy rates steady as expected after several measures to ease rates since December last year.
Sri Lanka's main stock index was down 0.02 percent at 6083.26 at 0628 GMT.
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