(Reuters) - The Sri Lankan rupee traded weaker on Monday, slipping from the previous session's more-than-one-week high, on dollar demand from equity outflows and importers, dealers said.
The spot rupee was traded at 130.70/80 per dollar at 0625 GMT, weaker from Friday's close of 130.55/60 per dollar, which was its highest level in more than a week.
"Appreciation is not on the cards. Slight depreciation towards 131 within this week is possible with the equity outflows and importer dollar demand," said a currency dealer, asking not to be named.
The currency has been hovering around three-month lows through much of last week as importer dollar demand and equity outflows were offset by dollar sales by state banks, dealers said.
The market expects downward pressure to continue ahead of festival import demand in April. Dealers expect the rupee to gradually weaken to 131.60 by the end of the first quarter due to seasonal imports.
However, the depreciation is expected to be mild as the central bank has strong reserves to defend the rupee.
Foreign investors bought a net 709 million rupees worth of government securities in the week ended Feb. 26 after being net sellers for the past two weeks. They sold a net 5.43 billion rupees in stocks in 15 straight sessions through Friday.
The rupee has gained about 3.4 percent since it hit a record low of 135.20 on Aug. 28 last year. It lost 2.5 percent in 2013.
At 0627 GMT, Sri Lanka's main stock index was down 0.19 percent, or 11.50 points, at 5,928.81, slipping from its 1-week high hit on Friday. (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)
