Sri Lanka rupee slips on importer dollar demand; shares down
* Rupee down 0.2 pct despite Treasury comments
* State bank sells $6 mln to support rupee-dealers
* Stocks slip on rupee, interest rate woes
COLOMBO, April 30 (Reuters) - The Sri Lankan rupee ended 0.2 percent down on Monday on as importers bought dollars and the market ignored a threat by the treasury secretary to resume intervention if the rupee drops beyond "tolerable" levels due to speculation.
Treasury Secretary P.B. Jayasundera told reporters on Monday that the currency should stabilise below 125 rupees and there was no fundamental reason for it to be beyond that level.
The rupee ended at 130.00/130.40 against the dollar, weaker from Friday's close of 129.90/130.00.
Dealers said a state bank, through which the central bank usually directs the market, sold about $6 million to support the rupee though that was not adequate to stop the fall.
The central bank said it would allow part of a $500 million bond raised by the state-owned Bank of Ceylon to be sold in the market and would use the rest to build up reserves.
"We will allow a part to the market," Central Bank Governor Ajith Nivard Cabraal told Reuters without elaborating on the amount he intended to allow into the market.
The central bank had expected the bond proceeds to support the rupee, but traders were less optimistic.
The rupee has recovered 2.4 percent since it hit an all-time low of 133.50 on Wednesday. But it has depreciated 12.2 percent since the central bank stopped intervening to defend a specific price on Feb. 9, and 15.2 percent from Nov. 19, when the government allowed a 3 percent devaluation.
The stock market edged down 0.39 percent, or 21.32 points, to 5,419.20 with investors worried about the rupee's fall, rising interest rates and slowing economic growth.
The day's turnover was 631.1 million rupees ($4.85 million), well below this year's daily average of 1.2 billion rupees.
The market saw a foreign outflow of 71.8 million rupees. Foreign investors have been net buyers of 21.2 billion rupees this year.
The Colombo bourse is one of the worst performing Asian markets this year, losing 10.8 percent.
Stock and foreign exchange markets will be closed on Tuesday for a public holiday. ($1 = 130.2500 Sri Lanka rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Robert Birsel)
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