The Sri Lankan spot rupee, which resumed trading on Friday after almost a month, hit a record low of 144.65 per dollar, hurt by importer dollar demand a day after the central bank said it had stopped significant intervention in the market. Central Bank Governor Arjuna Mahendran said late on Thursday that the monetary authority was not intervening in the market as it had done in the past, but stepped in to prevent abnormal imbalances due to one or two large transactions.
"We have a market which is not very liquid. We can't let one or two transactions completely to knock the rupee either way. So our job is to maintain the stability," Mahendran told reporters. "We will intervene when you have extraordinary transactions."
On Friday, the spot currency, which the central bank had not allowed to trade below 144 levels from January 27, surpassed its previous record low of 144.30 hit on January 4. The rupee ended at 144.40/70 per dollar, recouping some of the losses made earlier in the day after the banks dollar sales.
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