Sri Lanka's rupee rose 0.5 percent on Thursday, and posted a gain of 2.4 percent for the month, as foreign investors purchased government securities, while Fitch rating agency revised down forecast for the currency for 2019 and 2020. Fitch Solutions Macro Research, a subsidiary under Fitch Group in a report revised its average forecast for the rupee weaker to 186.00 per US dollar for this year and 192.00 in the next year, from the previous 177.00 and 183.00 respectively.

"We expect the rupee to continue weakening over the short term due to a worsening terms of trade, although the pace of depreciation is likely to ease from what was seen during the November/December 2018 constitutional crisis," it said. The rupee closed at 178.40/60 per dollar, compared with Wednesday's close of 179.30/60, market sources said. On Jan. 3, the rupee dropped to an all-time low of 183.00 against the dollar.

The currency has appreciated 2.4 percent so far this year. Investor confidence in Sri Lanka is stabilising after the country repaid a $1 billion sovereign bond in mid-January, Central Bank of Sri Lanka Governor Indrajit Coomaraswamy told Reuters on Monday.

Copyright Reuters, 2019