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30/35 against the greenback in the spot dollar market and drifted lower as the foreign exchange market continued to look for direction but stocks opened stronger. Colombo All Share Index rose 1.6 percent in the first half hour of trading.
In forex markets trades were done as low as 121 and the spot dollar was quoted as low as 121.00/121.20 rupees, dealers said.
A state name was later offering dollars at 120.
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20/30 dealers said but dealers believe it was not a central bank intervention.
Economic analyst say dollar inflows to the Treasury can be sold in the market with no negative effect to the exchange rate.
Dealers say importers are booking forward but there have not been significant exporter sales as yet.
Economists say it is usually for the currency to temporarily overshoot in a free float as the market searches for direction.
The rupee came under pressure from strong credit growth in 2011. However policy has since been tightened, and the authorities have also raised fuel prices.
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