The move comes a day after the IMF said its executive board was likely to consider in June Sri Lanka's request for the completion of a second loan review, a requirement for disbursing a third tranche of aid.

The rupee has been strengthening on expectations of inflows from a sovereign bond issuance and syndicated loans, dealers said.

"Every body is waiting for the sovereign bond and the SLDB (Sri Lanka Development Bond). It is the moral booster and the reserve booster," a currency dealer said.

He expects the rupee to stabilise on higher dollar liquidity after the anticipated inflows.

The country expects to raise up to $1.5 billion via a sovereign bond issuance and another $1 billion from two separate syndicated loans.

The Lankan government has tightened final guidance to 6.25 percent plus or minus 5 basis points a 10-year US dollar bond offering after an initial yield guidance of 6.625 percent area. ,

Rupee forwards were active, with two-week forwards  ended tad firmer at 153.25/35 per dollar, from Wednesday's close of 153.30/25.

"There was some selling by foreign banks and there was not much of demand for the latter part of the day," the dealer said.

Finance Minister Ravi Karunanayake had last week blamed "technical difficulties" for a two-month delay in receiving an around $160 million loan tranche from the International Monetary Fund and said the disbursement was expected after June 14.

Foreign investors also net bought government securities worth 908.9 million rupees ($5.98 million) in the week ended April 26, extending the net inflow to 7.2 billion rupees in four consecutive weeks. But they have net sold 57 billion rupees worth of government bonds so far this year.