COLOMBO: The Sri Lankan rupee traded steady near its three-week low on Tuesday in dull trade, but dealers said the currency could face some downward pressure during the week due to import bills.
The rupee was at 130.29/32 per dollar at 0632 GMT, little changed from Monday's close of 130.30/32. Early last week, it hit a more than one-year closing high.
"We do not see much pressure on the currency. But there are some heavy import bills expected, probably from oil imports," a currency dealer said on condition of anonymity.
"So, we expect the rupee to be under downward pressure later today or during this week."
Dealers, however, said they did not see any impact on the rupee due to $307 million in outflows from government securities a week earlier.
Offshore investors sold 40 billion rupees ($307 million) worth of government securities last week, official data showed on Monday, but the central bank said this would not affect the rupee.
Dealers said though the $307 million has been shown as outflows, foreign investors have not taken the funds out of the country.
A currency dealer at a foreign bank, which usually deals with foreign trading in government securities, on Monday said the country could also see similar amount of inflows in the near future. He did not elaborate.
The central bank has said the rupee would have appreciated to around 125 rupees per dollar had it not intervened by absorbing $750 million from the domestic foreign exchange market this year through July 14.
Dealers had been expecting the rupee to appreciate due to lack of strong growth in imports and private sector credit, despite lower interest rates.
Yields in treasury bills edged down further at a weekly auction on Wednesday.
Sri Lanka's main stock index was down 0.16 percent, or 10.59 points, at 6,745.93 at 0646 GMT, compared with the 33-month high hit on Monday. Turnover was 801.4 million rupees ($6.15 million) with 14.4 million shares changing hands.
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