COLOMBO, Aug 27 (Reuters) - The Sri Lankan rupee was a tad firmer on Wednesday as exporter dollar sales outpaced importer demand for the greenback while dealers expect the local currency to remain steady for the rest of the year after positive comments by the central bank chief last week.

Central bank Governor Ajith Nivard Cabraal said last week the banking regulator would intervene in the thinly-traded market whenever needed to keep the rupee stable. ID:nL4N0QQ4JE

The rupee LKR=LK was trading at 130.18/20 per dollar at 0540 GMT, slightly up from Tuesday's close of 130.20/22.

"Rupee is trading firmer, there are more exporter conversions than the import bills," a currency dealer said.

Foreign investors bought a net 1.81 billion rupees ($13.9 million) worth of government securities in the week ended Aug. 20, official data showed.

The People's Bank of China on Monday said it would allow the central bank of Sri Lanka to invest in the country's interbank bond market. ID:nB9N0QQ000

Sri Lanka's central bank in a statement said the agreement with the People's Bank of China will enable the bank to further diversify its reserves management activities into Chinese renminbi-denominated assets.

Sri Lanka's main stock index .CSE rose 0.06 percent, or 4.18 points, to 7,017.50, hovering near three-year highs.

Turnover stood at 230.2 million rupees ($1.77 million), with 41.6 million shares changing hands. (1 US dollar = 130.1500 Sri Lankan rupees)

(Reporting by Ranga Sirilal; Editing by Sunil Nair) ((ranga.sirilal@thomsonreuters.com; +94-11-232-5540; Reuters Messaging: ranga.sirilal.thomsonreuters.com@reuters.net; www.twitter.com/rangaba ))

Keywords: MARKETS SRI LANKA/