COLOMBO, Feb 26 (Reuters) - The Sri Lankan rupee ended firmer on Monday as exporters and banks sold dollars on fears of an appreciation in the local currency amid expectations of equity and capital inflows, dealers said.
The rupee ended at 154.85/95 per dollar, compared with Friday’s close of 155.15/20. The rupee hit a record low of 155.90 on Feb. 14.
“There were conversions today, on expectations of capital inflow to set up Exim Bank of China in Sri Lanka and some equity-related transaction inflow,” said a dealer.
“There can be import pressure tomorrow as the currency has come below 155.00 level.”
The local currency has weakened 0.9 percent so far this year, after declining 2.5 percent last year and 3.9 percent in 2016.
It is expected to be pressured by continued importer demand for dollars, dealers said.
A gradual depreciation in the rupee and higher volatility this year are expected on account of debt repayments by the government, dealers added.
The government must repay an estimated 1.97 trillion rupees ($12.68 billion) in 2018 - a record high - including $2.9 billion of foreign loans and a total of $5.36 billion in interest.
Foreign investors sold government securities worth net 3.7 billion rupees in the week ended Feb. 21, central bank data showed. ($1 = 155.4000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)