COLOMBO: The Sri Lankan rupee fell to a record low of 143.15 per dollar on Thursday, posting its fourth straight session of declines on importer demand for the greenback amid lower dollar liquidity.
Exporters were also reluctant to sell dollars on expectations the local currency could fall further, dealers said.
The rupee fell 0.17 percent to a record low of 143.15 per dollar, surpassing the previous all-time trough of 143.00 hit on Tuesday.
The rupee ended at 143.15/25 per dollar, compared with Tuesday's close of 142.95/143.00.
Sri Lankan markets were closed on Wednesday for a holiday.
Political infighting and populism measure are likely to slow down implementation of the budget's economic liberalisation measures, said global political risk research firm Eurasia group.
"Sri Lanka's 2016 budget highlights the government's weak commitment to fiscal consolidation and will leave its external accounts position vulnerable," Sasha Riser-Kositsky of Eurasia said in a research note.
On Tuesday, the central bank left the key interest rates steady at record lows for a seventh straight month.
"For a start, risks are mounting in the financial sector, amid a continued acceleration in credit growth," Krystal Tan, Asia Economist at Capital Economics said in a research note.
"Meanwhile, inflation is on the rise."
The rupee has dropped around 8.4 percent so far this year and 5.9 percent since the central bank allowed free-float on Sept. 4, Thomson Reuters data showed.
Dealers said the central bank had still been intervening through moral suasion after it had intervened in the market to check the fall in the rupee. Officials at the Central Bank of Sri Lanka were not available for comment.
The central bank sold dollars worth a net $277.95 million in October and $523.80 million in September, latest data showed. Dealers said part of that money was spent to defend the rupee.
Commercial banks parked 149.245 billion rupees ($1.04 billion) of surplus liquidity on Thursday, using the central bank's deposit facility at 6 percent, official data showed.
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