Sri Lanka cenbank allow rupee fall; stx slips

* Cbank still defends rupee pumping $30 mln

* Cenbank raise rates, caps banks' credit

* Foreign inflow at 71.5 mln rupees

COLOMBO, Feb 3 (Reuters) - Sri Lanka's central bank depreciated the rupee currency by 20 cents on Friday after it surprised the markets by tightening monetary policy with a 50 basis point policy rate hike earlier in the day.

The central bank's relaxation of the exchange rate comes after it spent $1.2 billion in the last 49 sessions to keep the rupee steady at 113.90, as it faces a current account deficit and balance-of-payments crisis.

The rupee ended at 114.10 a dollar, but still the central bank defended it by selling more than $30 million, dealers said.

Earlier, the bank raised policy rates by 50 percent and ordered commercial banks to cap their lending this year at 18 percent above their total 2011 loans.

The main share index ended 0.34 percent or 19.10 points weaker at 5,586.39, shrugging off the central bank's decision late on Thursday to allow foreign-owned companies to lend money to investors in stock market.

Shares in top private lender Commercial Bank of Ceylon fell 1.18 percent to 100.50 rupees while market heavyweight John Keells Holdings PLC fell 0.18 percent to 167.20 rupees.

Retail investors, meanwhile, booked profits to settle debts after the regulator suspended trading of warrants in Environmental Resources Investment PLC.

Warrants in Environmental Resources Investment PLC rebounded with an 81.25 percent jump after plummeting 70.91 percent the previous day.

Foreign investors were net buyers of 71.5 million Sri Lankan rupees on Friday, extending the net foreign buying to 878.9 million rupees worth of shares so far this year, after net outflows of 19.1 billion last year.

Sri Lanka's bourse is the worst performer among Asian markets with a 8.03 percent loss so far this year. It was 10th-best in 2011, after being on top in 2009 and 2010.

The day's turnover was 419.9 million rupees. Last year's average turnover was 2.3 billion.

The day's volume was 39.3 million shares compared to last year's record daily average of 102.7 million.

Both the stock and the currency markets were closed after half a day of trading on Friday in lieu of Sri Lanka's Independence Day on Saturday. ($1 = 114.1000 Sri Lanka rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Bryson Hull)