Dec 17 (Reuters) - The Sri Lankan rupee gained on Tuesday due to inward remittances despite dollar-buying by a state-run bank to curb upward pressure on the currency. Some dealers expect the rupee to continue its rising trend due to expected inflows ahead of Christmas and new year. The spot rupee was trading at 130.77/80 per dollar at 0654 GMT, gaining from Friday's close of 130.85/95. Both foreign exchange and stock markets were closed for a holiday on Monday. "We see a lot of inflows from inward remittances," a currency dealer said on condition of anonymity. "But we see a state bank has been buying the rupee cash at 130.75. So the rupee is capped around that level." Central Bank Governor Ajith Nivard Cabraal last week said that the monetary authority would only go in for limited intervention to prevent high volatility in the rupee. Currency dealers said the rupee was facing upward pressure as expatriates were sending money for their families ahead of Christmas and the New Year. The rupee has gained 3.4 percent since it hit a record low of 135.20 on Aug. 28. At 0655 GMT, Sri Lanka's main stock index was up 0.14 percent, or 8.15 points, at 5,803.81. (Reporting by Shihar Aneez; Editing by Anand Basu)

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