The rupee closed at Rs. 128.60/70 against the greenback after hitting an intraday high of Rs. 129.
"We saw state-names operating in the market which saw the rupee gain some ground after reaching the Rs. 129 mark against the dollar, we are not certain whether it is Central Bank intervention or not," a currency dealer said. The rupee opened on a six month low at Rs. `128.00/10.
State-names, or state banks, are the usual proxies for Central Bank intervention in the foreign exchange market. Dollar sales keep the rupee stronger.
A little intervention is alright just to maintain some stability, but it should not be used as a policy tool or the country could as well head for another balance of payments problem, currency dealers said.
The Colombo bourse closed the week on a positive note with All Share Price Index closing 0.18 percent higher and foreign investors becoming net sellers for the second time this week.
The main index gained 11.52 points before closing at 6,219.39 and the S&P SL20 closed 0.15 percent, up 5.26 points at 3,504.35.
Foreign selling amounted to Rs. 241.6 million leading to a net outflow of Rs. 81.9 million.
Turnover picked up to Rs. 577.23 million from Rs. 480.1 million the previous day.