COLOMBO, Sept 11 (Reuters) - The Sri Lankan rupee ended steady on Tuesday as importer dollar demand offset greenback sales by banks, but the unit was still under downward pressure due to global strengthening of the U.S. currency, traders said.
Emerging market currencies remained under pressure with a broad index down near 16-month lows.
The Sri Lankan rupee touched a fresh low of 162.65 per dollar on Thursday, hitting a new life-low for the 13th straight session, hurt by strong dollar demand from importers amid weakness in regional currencies, before the central bank cut the net open positions (NOP) of commercial banks.
Nandalal Weerasinghe, senior deputy governor at the central bank, said on Friday the monetary authority had observed that commercial banks were building up their positions without any fundamental reasons, which led to the cut in NOP.
The local currency, which hit a low of 162.37 in intraday trade on Tuesday, ended at 162.35/45 per dollar, unchanged from Monday's close.
Currency dealers declined to speak to the media citing central bank instructions. Officials from the central bank were not immediately available for comment.
Junior finance minister Eran Wickremaratne last week told Reuters that the government would leave the rupee to market forces to decide.
The currency has weakened 0.5 percent so far this month after a 1.2 percent drop last month, and has declined 5.7 percent so far this year. It will be under depreciation pressure due to year-end seasonal importer dollar demand, dealers added.
The currency is also hurt by weakness in the Indian rupee . India is Sri Lanka's biggest trading partner and the Indian rupee, which also hit a record low on Tuesday, has been one of the worst performers in Asia this year.
Foreign investors sold government securities worth a net 6.44 billion rupees ($39.68 million) in the week ended Sept. 5, extending the net outflow so far this year to 53.3 billion rupees worth of securities, central bank data showed. ($1 = 162.3000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Sunil Nair)