COLOMBO: The Sri Lankan rupee traded weaker on Tuesday as importer dollar demand outpaced inward remittances and exporter dollar sales, dealers said.
The dealers said they expect the local currency to remain steady for the rest of the year after positive comments by the central bank chief last week.
Central bank Governor Ajith Nivard Cabraal said last week the banking regulator would intervene in the thinly-traded market whenever required to keep the rupee stable.
At 0548 GMT, the rupee was at 130.20/23 per dollar, weaker from Monday's close of 130.18/20.
"There is importer (dollar) demand," a currency dealer said. Foreign investors bought a net 1.81 billion rupees ($13.9 million) worth of government securities in the week ended Aug. 20, official data showed.
The People's Bank of China on Monday said it would allow the central bank of Sri Lanka to invest in the country's interbank bond market.
Sri Lanka central Bank in a statement said the agreement with the People's Bank of China will enable the Bank to further diversify its reserves management activities into Chinese Renminbi denominated assets.
Sri Lanka's main stock index fell 0.21 percent, or 14.64 points, to 6,969.39, drifting further away from its near three-year highs hit on Friday.
Turnover was 634.2 million rupees ($4.9 million), with 54.5 million shares changing hands.
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