The Sri Lankan rupee closed slightly weaker on Wednesday with the central bank selling dollars at 157.70 to 157.80 rupees per dollar to select banks to arrest further fall, dealers said. The rupee closed at 157.80/95 per dollar, compared with Tuesday's close of 157.60/80. The currency hit an all-time low of 157.90 per dollar on May 2. It has declined 0.2 percent so far this month after a 1.5 percent fall in April.
"Today the central bank was not that aggressive. The demand for dollars was there," a currency dealer said, asking not to be named. "The emerging markets currencies are also under pressure." Officials at the Central Bank of Sri Lanka were not immediately available for comments. The euro slid to a new 2018 low on Wednesday as more investors bet on the dollar rising because of relatively higher interest rates, while concerns about the US exit from an international nuclear deal with Iran also supported the greenback.
The rupee will stabilise and the monetary authority will intervene to smooth high volatility as there is no reason for a weaker currency, Nandalal Weerasinghe, senior deputy governor at the central bank, said last week.
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