The Sri Lankan rupee fell on Friday on importer dollar demand, while bond yields dropped for a second day with the market expecting the local currency to trade steady on expected dollar inflows, dealers said. Sri Lanka expects to raise up to $1.5 billion via a sovereign bond issuance, while another $1 billion is expected from two separate syndicated loans.

Rupee forwards were active, with two-week forwards closing at 153.30/40 per dollar, compared with Thursday's close of 153.15/30. "The rupee will stabilise with higher dollar liquidity after the inflows," a currency dealer said, asking not to be named.

Copyright Reuters, 2017