COLOMBO: The Sri Lankan rupee traded slightly weaker on Monday due to thin importer dollar demand, currency dealers said, after the government stressed the importance of maintaining a flexible exchange rate regime.
Banks' reluctance to trade the rupee above 131.10 per dollar level limited the fall.
The spot rupee was quoted at 131.10/25 per dollar at 0540 GMT, compared with Friday's close of 131.10/20.
Two dealers said banks were reluctant to trade the currency above 131.10 per dollar, a level seen as desirable by the central bank, and forward trade was active. Three-day forward or spot next was traded steady at 131.22/25 per dollar, dealers said.
While presenting the 2014 budget, President Mahinda Rajapaksa, who is also the finance minister, said maintaining a flexible exchange rate regime along with productivity improvement is important to achieve the export revenue target of $20 billion in 2020.
Dealers and banks, however, said there would be hardly any change in the central bank's exchange rate policy as it is already under a flexible regime.
The rupee hit a record low of 135.20 on Aug. 28, but has managed to stem further losses and has gained 3.10 percent since then. At 0546 GMT, Sri Lanka's main stock index was 0.23 percent, or 13.19 points, up at 5,805.93.
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