COLOMBO, May 26 (Reuters) - The Sri Lankan rupee ended slightly higher on Friday as dollar selling by banks surpassed importer demand for the U.S. currency, traders said.
Rupee forwards were active, with spot-next forwards ending at 152.85/95 per dollar, compared with Thursday's close of 152.90/95.
One-week forwards ended at 153.00/10, compared with the previous close of 153.10/20.
There was a demand for dollars from a few local banks, said a currency dealer, adding that foreign banks were also selling the U.S. currency, maybe due to inflows into the stock market and unwinding of some of their dollar positions.
Dealers said the rupee is also under pressure after the central bank governor said last week that the bank will allow gradual depreciation of the currency.
Sri Lanka's central bank has purchased around $400 million directly from the market so far this year, Governor Indrajit Coomaraswamy said last week, adding it was targeting $1.2 billion in direct market purchases of dollars to boost the island nation's reserves this year.
Dealers said the central bank's plan will keep the rupee under pressure, with the market expecting about 4-6 percent depreciation in the currency this year.
The spot rupee did not trade on Friday.
The central bank fixed the spot rupee reference rate at 152.50 on May 5.
The central bank has allowed the currency to gradually depreciate since mid-December, revising its spot reference rate multiple times.
$1 = 152.3500 Sri Lankan rupees Reporting by Ranga Sirilal; Editing by Sherry Jacob-Phillips