COLOMBO, Sept 18 (Reuters) - The Sri Lankan rupee
ended down on Wednesday due to mild importer dollar demand,
while the central bank defended the currency via moral suasion,
dealers said, ahead of a U.S. Federal Reserve decision on its
ultra-loose monetary policy.
Dealers said the three-day forward, or spot-next, was active
on Wednesday after the central bank directed some banks not to
trade the spot above 132.25 rupees.
The spot-next ended at 132.35/45 per dollar, weaker from
Tuesday's close of 132.30/40.
The Fed will decide later on Wednesday when and by how much
it would scale back its asset purchases from $85 billion a
Dealers said any reduction may prompt foreign investors to
exit Sri Lankan government securities, which could put the rupee
However, central bank Governor Ajith Nivard Cabraal said on
Tuesday that Sri Lanka would not be hurt by the Fed's tapering.
The currency hit a record low of 135.20 on Aug. 28, but has
recovered since then. It has fallen 3.6 percent this year.
The rupee has been falling since early July when foreign
investors started pulling out of local bonds as U.S. Treasury
yields rose in expectation of a Fed pullback.
The stock and foreign exchange markets will be closed on
Thursday for a Buddhist holiday.
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by