COLOMBO: The Sri Lankan rupee fell on Monday as importer dollar demand outpaced selling of the greenback by a private bank possibly to defend the local currency, dealers said.
The private bank sold dollars at 143.90 rupee levels to select traders, they said, with some saying it might have sold the greenback on behalf of the central bank.
Officials at the central bank were not available for comments.
The rupee ended at 144.00/20 per dollar, down 0.1 percent from Thursday's close of 143.85/95. Markets were closed on Friday for a Hindu religious holiday.
"A private bank sold dollars at 143.90. But demand was higher and exporters were not selling (dollars) on expectations the rupee would weaken further," said a currency dealer, asking not to be named.
The market, however, expects depreciation pressure on the rupee to ease due to a rise in commercial banks' statutory reserve ratio by 150 basis points from Jan. 16 and on expected inflows from foreign deposits.
The yield on 91-day t-bills has risen 40 basis points to a more than three-month high of 6.78 percent in three weekly auctions since the Dec. 30 monetary policy announcement.
Commercial banks parked 10.623 billion rupees ($73.77 million) of surplus liquidity on Monday using the central bank's deposit facility at 6 percent, official data showed.
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