The rupee closed firmer on Tuesday on dollar selling by banks, snapping an eight-session losing streak and off a near six-week low hit on Monday after lingering investor concerns following the Easter Sunday bombings. The rupee ended at 176.90/177.10 per dollar, compared with Monday's close of 177.55/75, market sources said. Analysts say it could weaken further due to outflows from stocks and government securities.
The island's currency lost 1 percent last week, but is up 3.2 percent this year as exporters converted dollars after investor confidence stabilised following the repayment of a $1 billion sovereign bond in mid-January. The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. Foreign investors sold a net 3.3 billion rupees worth of government securities in the week ended April 30, extending the net foreign outflow to 10 billion rupees from the securities so far this year, the latest central bank data showed. Investigators have dismantled a major part of the network linked to the Easter Sunday bombings, Prime Minister Ranil Wickremesinghe said on Tuesday, but warned the chance of further Islamist militant attacks could not be ruled out.