The spot rupee, which traded 154.00 per dollar during the day, ended at 153.75/95, compared with Tuesday's close of 153.97/154.05.

"There was demand (for dollars). But we saw exporters coming in when the currency touched 154.00 per dollar," said a currency dealer.

Dealers said the rupee might see volatility with the government's heavy debt repayment this year.

Sri Lanka aims to raise $500 million this month via development bonds, the central bank said last week, as the government faces unprecedented debt repayment this year.

President Maithripala Sirisenea's administration must repay an estimated 1.97 trillion rupees ($12.85 billion) in 2018 - a record high - including $2.9 billion of foreign loans, and a total of $5.36 billion of interest.

The currency fell 2.5 percent last year and 3.9 percent in 2016.

The central bank, while announcing its key economic policies for the year on Jan. 3, said it has allowed more flexibility in determining the exchange rate based on market conditions.

It has also said intervention policies will be adopted consistent with a flexible exchange rate regime and supportive of improving foreign exchange market functionality, and maintaining a competitive exchange rate will be an important objective.