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The rupee opened at 128.40/60 levels against the US dollar and weakened in mid-day trade.
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Dealers say there were higher levels of forward covering in the market including by foreign investors in rupee bonds.
Sri Lanka's bond yields have also edged up.
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A popular 5-year bond maturing on April 01, 2018 was quoted around 11.
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40/45 percent Friday up from 11.30/35 a day earlier.
Last week the bond was trading at 11.
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10/15 levels.
An 8-year bond maturing on May 01, 2021 was quoted at 11.
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75/85 percent, from around 11.50 levels on Monday, dealers said.
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Foreign investors have cut their positions in many emerging markets and currencies have weakened.
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Fridays selling came mostly from domestic investors, dealers said.
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Sri Lanka's rupee is loosely pegged to the US dollar and operates with less intervention than in the past.
Despite having policy rate much higher than the US dollar, the rupee has tended to weaken because the central bank buys dollars, especially loans to the state, to generate liquidity.
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Corrected opening 128.40/60