COLOMBO, May 31 (Reuters) - Sri Lankan rupee ended slightly firmer on Wednesday due to dollar selling by a foreign bank, but the rupee is expected to weaken as floods and landslides brought damage and dented market sentiment, dealers said.
The extent of the damage is yet to be assessed, with Sri Lanka's main agricultural exports - tea and rubber - hit by the worst torrential rains in 14 years due to the cyclone "Mora" formed in the Bay of Bengal.
The floods would have an adverse impact on agricultural exports, putting pressure on the rupee, currency dealers said. Analysts said hospitality and manufacturing sectors are likely to be the worst-hit industries.
Rupee forwards were active on Wednesday, with spot-next forwards ending at 152.85/95 per dollar, compared with Tuesday's close of 152.95/153.00 per dollar.
"We saw some dollar selling by a foreign bank in the latter part of the day, probably from inflows into government securities," said a currency dealer.
The floods could also put pressure on the overall GDP and government budget deficit with high infrastructure spending, dealers said.
The rupee has been under pressure after the central bank governor on May 18 said the bank would allow gradual depreciation of the currency.
The spot rupee did not trade on Wednesday.
The central bank fixed the spot rupee reference rate at 152.50 on May 5.
Foreign investors bought a net 14.6 billion rupees ($95.61 million) worth of government securities in the two weeks ended May 24. They have sold a net 42.1 billion rupees worth of securities so far this year. ($1 = 152.5000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Amrutha Gayathri)