COLOMBO: The Sri Lankan rupee edged up on Tuesday on exporter dollar conversions, but trading was lacklustre as many investors stayed away in a holiday-shortened week, currency dealers said.
The rupee was at 143.50/70 per dollar at 0741 GMT, edging up from Monday's close of 143.65/90. It hit a record low of 143.80 on Dec. 15.
The currency has been on a downward trend during the whole of 2015 and the fall has been steep since the central bank allowed free float on Sept. 4. Currency dealers expect the rupee to weaken further in 2016 due to lower reserves and higher imports.
"There was some exporter selling," a currency dealer said, asking not to be named.
The rupee has fallen 8.6 percent so far this year. It has declined 6.1 percent since the float.
Dealers said the rupee would remain weak unless Sri Lanka tightens both monetary and fiscal policies. The island nation's high dependency on imports, lower interest rates and lower foreign currency reserves has weighed on the currency.
Finance Minister Ravi Karunanayake told parliament last week that Sri Lanka's reserves were at "a healthy" $6.1 billion. However, that figure is 26 percent lower than the reserves at the end of 2014.
Sri Lanka's main stock index was down 0.33 percent by 0754 GMT.
Turnover stood at 199.8 million rupees.
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