The Sri Lankan rupee ended weaker on Wednesday, hurt by importer dollar demand even as concerns of further depreciation continued to weigh, dealers said. The market has factored in a gradual depreciation risk for the rupee and expects a 4-5 percent fall in the currency this year, they said. Finance Minister Ravi Karunanayake said after market hours on Tuesday that protecting a fragile rupee was more important than controlling interest rates as the local currency tended not to rebound after depreciating.
Rupee forwards were active, with two-week forwards ending at 151.25/30 per dollar, weaker from Tuesday's close of 151.15/25. Foreign investors net sold 31.38 billion rupees ($208.30 million) worth of government securities in the four weeks to February 8, according to latest central bank data. "The rupee is under pressure on importer demand and we will see gradual depreciation over the period," said a currency dealer, requesting not to be named.
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