COLOMBO: The Sri Lankan rupee traded firmer on Wednesday as banks sold dollars in dull trade, but currency dealers said the ongoing lack of dollar inflow maintained depreciation pressure on the rupee.
The market continued to trade one-day forwards as the spot dollar has not been moving beyond 131.60 rupees.
The one-day forwards edged down to 131.65/70 from Tuesday's close of 131.66/72 at 0442 GMT.
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.
But it has been steady around 131.60 since then as the central bank has not allowed spot dollars to be traded beyond 131.60, amid a rise in foreign holding of government securities, dealers said.
The central bank has said there have been net foreign inflows to government securities but it has not published foreign holdings in long term T-bonds separately since June 28.
Sri Lanka's main stock index was up 0.21 percent, or 13.13 points, to 6,156.00 at 0443 GMT.
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