The Sri Lankan rupee fell on Friday as a state-run bank, through which the central bank usually directs the market, raised the currency's peg against the dollar by 15 cents, allowing the exchange rate to depreciate to 134.30. The local currency ended 0.11 percent weaker at 134.30 per dollar compared with Thursday's close of 134.15. The market had expected the central bank to allow the rupee to depreciate further, in line with other regional currencies that have declined against the dollar.
The state-run bank had reduced the currency's peg against the dollar by 10 cents on Wednesday, allowing the exchange rate to appreciate to 134.15 after allowing a 75 cent fall on six occasions from August 5 through Tuesday.