Sri Lankan rupee forwards slid for a second successive session on Wednesday due to importer dollar demand, while dealers expect the local currency to remain under pressure in the near term due to growing uncertainty after the announcement of new tax hikes. One-week rupee forwards, which act as a proxy for the spot currency, ended at 146.40/50 per dollar, down from Monday's close of 145.85/90. Markets were closed on Tuesday for a public holiday.
The spot did not trade below 143.90, seen as the central bank's desired level. Analysts said the rupee would face downward pressure until any positive news. S&P revised its outlook on Sri Lanka's "B-plus" sovereign credit rating to negative on March 10, a week after Fitch downgraded its rating by a notch to "B-plus" with a negative outlook. Dealers also said policy uncertainty is deepening with the new taxes, and the capital gains tax may discourage foreign investors.