COLOMBO, March 8 (Reuters) - The Sri Lankan rupee ended steady on Thursday as importer dollar demand offset selling of the greenback by exporters even as communal violence in the central district of Kandy continued to weigh on sentiment, dealers said.
After days of violence, a curfew in the Sri Lankan town of Kandy was temporarily lifted on Thursday.
The rupee closed at 155.35/45 per dollar, little changed from Wednesday’s close of 155.35/40. It hit a record low of 155.90 per dollar on Feb. 14.
“The importer demand in early trade was offset by late exporter dollar sales,” said a currency dealer.
Dealers said trading activity could be muted on Friday as countrywide protests by Muslims over the violence are expected.
The rupee has weakened 1.27 percent so far this year, after declining 2.5 percent last year and 3.9 percent in 2016.
It is expected to be pressured by continued importer demand for dollars ahead of the traditional New Year in April, dealers said.
A gradual depreciation in the rupee and higher volatility this year are expected on account of debt repayments by the government, dealers added.
The government must repay an estimated 1.97 trillion rupees ($12.68 billion) in 2018 - a record high - including $2.9 billion of foreign loans and a total of $5.36 billion in interest.
Foreign investors sold government securities worth a net 3.2 billion rupees in the week ended Feb. 28, central bank data showed.
$1 = 155.4000 Sri Lankan rupees Reporting by Shihar Aneez; Editing by Vyas Mohan