COLOMBO: The Sri Lankan rupee fell to a more than one-week low on Thursday due to importer dollar demand from a state bank in the absence of any central bank intervention, dealers said. The spot rupee was traded at 130.65/72 per dollar at 0527 GMT, its weakest since March 3 and down from Wednesday's close of 130.60/65.
"There is importer demand and a state bank was buying. I don't think it's the intervention," a currency dealer said on condition of anonymity.
"If the buying continues the rupee will depreciate." The currency has gained 0.27 percent in the last 11 sessions through Thursday, Thomson Reuters data showed.
The rupee has been on a rising trend since Feb. 27 amid weak demand for dollars from importers, dealers said.
The market, however, expects downward pressure due to high imports for the traditional new year in mid-April and outflows from equities, though the depreciation is expected to be mild as the central bank has strong reserves to defend the rupee.
Foreign investors sold a net 5.2 billion rupees worth of stocks in 23 straight sessions through Wednesday, and sold a net 4.57 billion rupees worth of government securities for the week ended March 5.
The rupee has gained about 3.5 percent since it hit a record low of 135.20 on Aug. 28 last year.
It lost 2.5 percent in 2013. At 0617 GMT, Sri Lanka's main stock index was down 0.33 percent, or 19.49 points, at 5,914.06.
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