COLOMBO: Sri Lankan rupee forwards ended weaker on Thursday due to dollar demand from importers, but moral suasion by the central bank limited its fall, dealers said.
The local currency is under pressure as imports continue to rise on stable foreign exchange and low interest rates, they said.
The rupee will likely remain weak due to rising seasonal imports, at least through November and then start to inch up in December on remittances, they added.
The spot currency ended at 131.00/30 per dollar compared with Wednesday's close of 131.00/10.
Dealers said the central bank defended the local currency at 131.00. Central bank officials were not immediately available for comment.
Three-day forwards, or spot-next, ended at 131.25/30 per dollar compared with Wednesday's close of 131.15/25. Dealers said the central bank lowered its desired level for the three-day forwards by 10 cents to 131.25.
They said exporters and banks were reluctant to sell dollars on expectation the currency would weaken further.
Overseas investors sold a net 39.54 billion rupees ($302 million) worth of government securities in the eight weeks through Nov. 12, data from the central bank showed.
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