COLOMBO: The Sri Lankan rupee traded firmer on Monday as exporters and banks sold the dollar, but dealers said the currency is likely to remain under pressure in the absence of strong dollar inflows.
The rupee spot next or one-day forward, which was active in the market in the absence of spot trade, was traded at 132.90/133.10 per dollar at 0725 GMT, up from Friday's close of 133.00/10.
The currency hit a record low of 135.20 per dollar on Wednesday, amid panic buying by importers, before the central bank governor said the currency movement was an aberration.
Spot rupee was quoted at 133.00 in early trade, Thomson Reuters data showed.
"If we don't see strong dollar inflows, the rupee will continue to depreciate in the long term as it is still under pressure," a currency dealer said.
The rupee has been falling since early July as foreign investors have pulled out of Sri Lanka's treasury bonds on expectations the Federal Reserve will soon begin to taper its massive bond buying programme.
Foreign holdings in government securities have fallen 2 percent, or 10.08 billion rupees ($75.85 million), to 493.36 billion rupees in the week ended Aug. 28, the central bank's latest data showed.
The rupee has fallen nearly 5 percent since June 7 and nearly 4 percent so far this year, after depreciating by around 10 percent in 2012.
Sri Lanka's main stock index traded 0.18 percent or 10.44 points weaker at 5,823.60 at 0729 GMT.
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