COLOMBO: The Sri Lankan rupee held steady on Friday around its 10-month closing low, with importer dollar demand from a state-run bank offset by dollar sales from exporters.
The rupee was quoted at 131.65/70 at 0538 GMT, little changed from Thursday's close of 131.65/75, its lowest finish since Sept. 19.
"A state bank has been buying dollars and the demand for dollars was offset by usual exporter (dollar) sales," said a currency dealer.
Dealers said rupee liquidity was tight and the central bank pumped 3 billion rupees ($22.79 million) into the market through a reverse repo auction at 8.28 percent.
The rupee has fallen around 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 expect the rupee to move in the range of 131.50 to 132.00 in the short term and continue to depreciate unless the central bank steps in with monetary tightening measures.
Sri Lanka's main stock index was 0.03 percent or 1.90 points firmer at 6,040.06 by 0546 GMT.
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