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COLOMBO Jan 9 The Sri Lankan rupee traded steady on Monday, but dealers expect it to fall further on growing demand for dollars from foreign banks that facilitate sales of government securities by foreign investors.
The rupee has been under pressure due to rising imports and net selling of government securities by foreign investors, dealers said.
Rupee forwards were active, with two-week forwards trading at 150.60/75 per dollar at 0611 GMT, steady from Friday's close.
"The market is expecting some more depreciation as foreign investors are exiting government securities," said a currency dealer who declined to be named.
"We have not seen any moral suasion today and the market did not trade one-month and one-week forwards."
Last week, the central bank's moral suasion prevented further decline even as the monetary authority signalled a change in its intervention policy.
Officials from the central bank were not available for comments.
Central Bank Governor Indrajith Coomaraswamy said on Tuesday that defending the rupee with foreign exchange reserves "doesn't seem sensible" as it has always been followed by a sharp depreciation in the currency.
The spot rupee was also hardly traded, dealers said.
Sri Lankan shares traded marginally weaker at 6,146.84 as of 0618 GMT, hovering near its lowest since April 4. Turnover stood at 296.2 million rupees ($1.98 million).
($1 = 149.4500 Sri Lankan rupees) (Reporting by Shihar Aneez and Ranga Sirilal; Editing by Vyas Mohan)