COLOMBO, Dec 20 (Reuters) - The Sri Lankan rupee edged down on Friday, retreating from a nearly two-month closing high, as a state-run bank bought dollars at a lower level to curb sharp appreciation in the currency, dealers said.
The spot rupee was at 130.75/78 per dollar at 0550 GMT compared with Thursday's close of 130.75/75, which was its highest close since Oct. 25.
Dealers said one of the two state-run banks, through which the central bank usually directs the market, bought dollars at 130.75 rupee.
"There were dollar inflows from remittances and exporter conversions of dollars. But the (state) bank buying kept the rupee at around 130.75," said a currency dealer.
The rupee had been under upward pressure since mid-November as expatriates were sending money for their families ahead of Christmas and the New Year.
The rupee has gained around 3.4 percent since it hit a record low of 135.20 on Aug. 28.
At 0550 GMT, Sri Lanka's main stock index was up 0.12 percent, or 6.98 points, at 5,873.98. (Reporting by Shihar Aneez; Editing by Anand Basu)