Sri Lanka’s rupee strengthened against the US dollar in Tuesday’s spot trading, with dealers quoting the currency at 334.65/75.
The move represents a further improvement from the 334.90/335.00 level seen the previous day, extending a recent trend of stabilization and modest appreciation for the island nation’s currency.
Domestic bond yields edged higher during the session, according to dealer reports.
The simultaneous strengthening of the rupee and rise in local bond yields suggests a complex market dynamic where currency support coexists with tightening conditions in the sovereign debt market.
The rupee’s recovery follows a period of volatility, having stabilized at 336.75/337.50 on Thursday before strengthening to 335.25/35 on Friday.
The current quote marks a notable improvement from the 337.00/75 level recorded earlier in the week, indicating a reversal of the recent depreciation trend that had weighed on the currency.