The Sri Lankan rupee touched a record low of 160.65 per dollar on Tuesday as importer dollar demand and foreign outflows from government securities weighed on the currency, dealers said. The rupee hit 160.65 earlier in the trade, before closing at 160.60/70, compared with Monday's close of 160.50/70. It surpassed a record low of 160.60 hit in the previous session. The currency has declined 4.6 percent so far this year.
Dealers said some importers bought dollar ahead of a public holiday on Wednesday, while the absence of dollar conversions by exporters and outflows from equities pushed the rupee down. The markets will be closed on Wednesday to observe Hajj festival. Sri Lanka's stock market has suffered an outflow of 888.8 million rupees ($5.5 million) in the last five sessions through Tuesday.
Exporters are holding on to US dollars as they expect the local currency to decline further, dealers said. The dollar fell for a fourth consecutive session on Tuesday in its worst spell since March after critical comments from US President Donald Trump about the Federal Reserve.