In a sterilized foreign exchange sale, dollars are sold by the monetary authority and money is printed adding to new demand. While overnight rupee injections also generates demand in economy, it can be less damaging than longer term cash injections.
Sri Lanka's central bank has printed 8billion rupees for one month at 9.81%.
The rupee however weakened on Thursday, and there was state bank selling to push the exchange rate up, while liquidity was already short.
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