COLOMBO: The Sri Lankan rupee slipped on Wednesday due to importer dollar demand, with dealers shifted to one-day forward trades by the central bank, which wanted to keep the spot dollar rate below 131.60 rupees.
One-day forwards weakened to 131.75/78 from Tuesday's close of 131.73/75 at 0555 GMT.
Dealers said pressure on the currency would remain as exporters adopted a wait-and-see approach, while remittances had also dried up. The downward pressure on the rupee could intensify if there were no dollar inflows in the short term, they added.
The rupee has fallen around 4 percent since June 7, after foreign investors started to pull out of Sri Lanka's treasury bonds due to a rise in US treasury yields.
Data from the central bank, which has stopped publishing foreign holdings in long term T-bonds separately since June 28, showed total foreign holdings in government securities rose 1.2 percent between June 5 and Aug. 2, which currency dealers attributed to foreign buying in short term T-bills.
Sri Lanka's main stock index was 0.59 percent or 36.39 points firmer at 6,157.84 at 0545 GMT.
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