COLOMBO: The Sri Lankan rupee ended flat near a 10-month low, but dealers expect downward pressure on the currency to persist due to importers’ demand for dollars.

The rupee closed at 131.65/70, steady from Tuesday’s close.

It had closed at 131.65/75 on Thursday, its lowest close since Sept. 19.

Dealers said that downward pressure on the rupee could intensify if there were no dollar inflows.

“If the central bank tries to defend the currency, Sri Lankan exporters may lose competitiveness in the global markets with many countries including India having allowed depreciation,” one dealer said on condition of anonymity.

The rupee has fallen 4.1 percent since June 7 as foreign investors pulled out of Sri Lankan bonds and other emerging market assets due to a rise in US treasury yields on expectations of a scaleback by the Federal Reserve of its stimulus program.

Dealers expect the rupee to move in a range of 131.50 to 132.00 in the short term and then will continue to depreciate unless the central bank steps in with monetary tightening measures or significant dollar inflows come into the country.