Rupee hits...

“After initial jerk, the market settled. There was no panic and demand was heavy in the morning when the market opened for trading. We expect similar pressure on Friday morning though some remittances ahead of next week’s hajj festival could ease the pressure.”

Big importers are expected to buy dollars on Friday given that there are some sizable imports bills to be settled next week, he said, adding that the absence of intervention by the Central Bank could lead to some volatility.

Exporters and remittance converters are holding onto their dollars as they expect the local currency to decline further, other dealers said.

The Sri Lankan market is also concerned about the Indian rupee’s fall as India is Sri Lanka’s biggest trading partner. India’s rupee, the region’s worst performing currency this year, weakened as much 0.6 percent to a fresh low yesterday as worries about a widening trade deficit soured sentiment.

Meanwhile, other bruised emergingmarket currencies fought to regain their footing, after China said it will hold trade talks with the United States later this month and Turkey’s lira continued its recovery run.

Central Bank Governor, Indrajit Coomaraswamy, had told reporters early this month after holding key monetary policy rates steady that several emergingmarket currencies had declined more than the Lankan rupee, adding that “if we reduce rates that would put further pressure on the