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Sri Lanka rupee weakens to new life low of 117.10 against greenback

April 20, 2009 (LBO) - Sri Lanka rupee fell steeply to 117.
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10 levels against the greenback Monday, after opening at 116.00/20 levels, with no intervention from the monetary authority, dealers said.
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Sri Lanka's foreign exchange markets are coming to life after a lazy traditional New Year holiday week when demand for dollars was muted.
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The rupee weakened as much as 117.10 with a foreign bank on the buying side, dealers said.

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The rupee was later quoted around 116.90/117.00.

Sri Lanka is awaiting an International Monetary Fund bailout as early as next week, if prior actions are carried out on schedule.

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One prior condition of a bailout is to float the currency and stop a cycle of simultaneous interventions in foreign exchange and domestic money markets called 'sterilized intervention.'

The rupee weakening came as the military said it had breached an earth bund defence of Tamil Tigers in north eastern Sri Lanka.

The Tigers are making a last stand in a narrow coastal strip of land, behind tens of thousands of civilians.

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The military said thousands of civilians had poured into government held areas Monday.

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