Sri Lanka’s rupee weakened further against the US dollar in Wednesday’s spot trading, with dealers quoting the currency at 336.50/80.
The move marks a continuation of the depreciation trend seen in Tuesday’s session, when the rupee closed at 335.15/40, down from 334.50/75 the day prior.
Despite the currency’s slide, local bond yields remained broadly steady, according to market participants.
The divergence suggests that investors are not yet pricing in immediate inflationary pressure from the weaker exchange rate, or that sovereign debt demand remains insulated from short-term FX volatility.
The rupee’s weakness comes as Sri Lanka faces renewed inflationary headwinds.
Annual inflation accelerated to 5.4% in May, up from 4.7% in April, reversing a recent cooling trend.