The rupee forwards were active, with two-week forwards closing at 153.25/30 per dollar, weaker from Monday's close of 153.10/20.

"The rupee will be steady between a narrow range of 153.10-153.40 until we see some direction. We don't see any depreciation pressure now," a currency dealer said, asking not to be named.

The IMF is yet to approve the third tranche of a $1.5-billion loan, and the market expects the approval to help boost sentiment. Finance Minister Ravi Karunanayake met IMF officials in Washington last week.

Government officials have said authorities would go for an up to $1.5 billion sovereign bond sale "soon".

Sri Lanka has seen a surge in foreign inflows into equities and government securities since early this month.

Foreign investors bought equities worth a net 12.1 billion rupees in 23 consecutive sessions through Tuesday.

They also bought government securities worth 4.17 billion rupees in the week ended April 19 on a net basis. However, they have been net sellers to the tune of 58 billion worth of government bonds so far this year.