Rupee hits record low on importer dollar demand

COLOMBO (Reuters) - The Sri Lankan rupee hit a record low for a third straight session yesterday due to dollar demand from importers and foreign banks amid outflows from government securities, while stocks rose for a third consecutive session to a more than one-week closing high.

The rupee fell to its all-time low of 170.40 per dollar, surpassing the previous low of 170.10 hit on Thursday, on importer demand for the greenback and foreign selling in government securities, market sources said. 

The Central Bank surprised financial markets on Tuesday by leaving its key policy rates unchanged, despite heavy pressure on the rupee and foreign outflows from government securities. 

The Central Bank said on Tuesday it purchased US$ 4 million from the market in the previous day, but it has sold a net US$ 184 million to the market so far this year to defend the currency.

The rupee ended at 170.25/30 per dollar, compared with the previous close of 170.05/20. The rupee has weakened 0.5 percent so far this month after a 4.7 percent drop in September against the dollar. It has declined 10.69 percent so far this year.