COLOMBO: The Sri Lankan rupee was slightly firmer on Thursday due to dollar sales by banks in thin volume and as importer dollar demand too dried up, currency dealers said.
Spot rupee traded at 131.52/55 per dollar, firmer from Wednesday's close of 131.50/58.
"All depends on state demand (for oil bills). If not for them, the rupee could come down further," said a currency dealer asking not to be named.
The rupee fell around 4 percent between June 7 and July 18, after foreign investors started pulling out of Sri Lanka's treasury bonds due to a rise in US treasury yields on expectations of a winding down of monetary stimulus by the Federal Reserve.
The currency has been steady around 131.60 since then as the central bank has not allowed the spot to be traded beyond 131.60, amid a rise in foreign holdings of government securities, dealers said.
The central bank has said there have been net foreign inflows into government securities, but it has not published data on foreign holdings in long-term T-bonds separately since June 28.
Sri Lanka's main stock index was 0.03 percent, or 2.06 points weaker at 6,206.61 at 0620 GMT.
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