On Tuesday the rupee closed around 121.30/60 against the greenback. In money markets overnight gilt-backed repos were quoted at 8.80/90 percent levels and call money was at 9.75/85 percent.
In bond markets a March 2014 bond was quoted around 11.50/55 percent and 3-year bond maturing on 15 July 2012 was quoted at 11.70/12.00 percent, dealers said.
At this week Treasury bill auction, the 3-month yield rose 31 basis points to 10.11 percent, the six month rates rose 24 basis points to 10.18 percent and the 12-month yield rose 15 basis points to 10.45 percent.
Sri Lanka's interest rates have to increase to slow credit and reduce pressure on a dollar peg.
Stocks were down 0.2 percent in the first hour of trading, with 58 million rupees of turnover.
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