The Sri Lankan rupee hit a record low for a third straight session on Wednesday after the central bank chief said on Friday that the currency would depreciate gradually as dollar outflows surpass inflows. Dollar selling by exporters in late trade helped the spot rupee recover from the record low of 158.50 per dollar and closed at 158.00/30 per dollar, compared with Tuesday's close of 158.10/30.
Dealers said the market switched to rupee forwards as buying dollars for spot rupee was "very difficult" amid worries that the central bank could take actions against possible market manipulations. The one-month rupee forwards traded at as low as 159.70 per dollar in early trade, dealers said. "We saw exporters coming to the market when the spot was traded at 158.50," a currency dealer said.
The currency has declined 0.25 percent so far this month after a 1.5 percent fall in April. It has fallen 3 percent this year. The central bank is "studying carefully" if there was extra pressure on the currency than what was expected, and also the behaviour of market participants, central bank chief Indrajit Coomarswamy had said on Friday.
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