March 13, 2014 / 11:40 AM / in 5 years

Sri Lanka rupee falls to near 3-week low on importer dollar demand

COLOMBO, March 13 (Reuters) - The Sri Lankan rupee fell to a near three-week low on Thursday on importer dollar demand in the absence of any central bank intervention, dealers said.

The spot rupee ended at 130.68/75 per dollar, its weakest close since Feb. 28 and down from Wednesday’s close of 130.60/65.

“There was importer demand in the morning and a state bank bought (dollars),” a currency dealer said on condition of anonymity.

Dealers said the rupee was expected to trade in the range of 130.50 to 130.75 in the near future.

The currency has gained 0.25 percent in the last 11 sessions through Thursday, Thomson Reuters data showed. It has been on a rising trend since Feb. 27 amid weak demand for dollars from importers, dealers said.

The market, however, expects downward pressure due to high imports for the traditional new year in mid-April and outflows from equities, though the depreciation is expected to be mild as the central bank has strong reserves to defend the rupee.

Foreign investors sold a net 5.2 billion rupees worth of stocks in 24 straight sessions through Thursday, and sold a net 4.57 billion rupees worth of government securities for the week ended March 5.

The rupee has gained about 3.4 percent since it hit a record low of 135.20 on Aug. 28 last year. It lost 2.5 percent in 2013.

Reporting by Ranga Sirilal and Shihar Aneez; Editing by Anupama Dwivedi

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