COLOMBO, Oct 10 (Reuters) - The Sri Lankan rupee traded a tad weaker from its near three-month high on Thursday due to mild importer dollar demand, but dealers expect the currency to be stable in the short term.
Dealers said they expected the rupee to move within a narrow range in the short term with little volatility after the central bank governor said the rupee would 'behave in a stable manner' in the next few months.
Spot rupee was trading at 131.22/25 per dollar at 0514 GMT, slightly weaker from its Wednesday's close of 131.15/20.
Dealers said the currency has been trading within a narrow range of 131.00 and 131.20.
The rupee hit a record low of 135.20 on Aug. 28, but has managed to stem further losses since then.
Globally, the dollar pulled further away from an eight-month low on Thursday, as investors grew hopeful that Washington will end the political wrangling and break the U.S. fiscal impasse that has sapped market confidence.
The dollar was close to an eight-month trough touched last week against a basket of currencies as the U.S. government shutdown entered a second week.
Sri Lanka's main stock index was up 0.42 percent, or 24.84 points, at 5,934.79 at 0551 GMT.
(Reporting by Ranga Sirilal and Shihar Aneez; Editing by Gopakumar Warrier) Keywords: MARKETS SRILANKA/RUPEE
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