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Thursday, 21 February 2019 01:31 - - {{hitsCtrl.values.hits}}
REUTERS: The Sri Lankan rupee rose 0.2 % on Wednesday in a lacklustre trade on dollar sales by banks, market sources said.
The stock market fell for the third straight session to a near four-month low as foreign investors exited from the island nation’s risky assets.
The rupee ended at 179.50/70, compared with Monday’s close of 179.80/180.00, market sources said. Markets were closed on Tuesday for a public holiday.
The local currency had posted a weekly loss of 0.42 % in the last week due to high dollar demand from importers and outflows from the stock market.
It has risen 1.7 % so far this year as exporters converted dollars and foreign investors purchased government securities amid stabilising investor confidence in Sri Lanka after the country repaid a $1 billion sovereign bond in mid-January.
Sri Lanka’s central bank is expected to leave its key interest rates steady on Friday, a Reuters poll showed, as the island’s economy slowly recovers from a political crisis that sparked credit downgrades by all three major global rating agencies.
The bond market saw inflows of Rs. 3.3 billion in the week ended 13 February, recording its fourth straight weekly inflow, the latest central bank data showed. Worries over heavy debt repayment after a 51-day political crisis that resulted in a series of credit rating downgrades dented investor sentiment as the country is struggling to repay its foreign loans.
Sri Lanka has raised its borrowing limit for dollar-denominated bonds to $3 billion and chosen seven lead managers to tap the international market as soon as possible, three Government sources said on Tuesday.
The rupee dropped 16 % in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows.
The Colombo Stock Exchange index fell 0.29 % to 5,880.17 on Wednesday falling for the third straight session, its lowest close since 26 October.
The benchmark index had fallen 0.92 % last week, after losing 0.3 % in the previous week. It declined about 1 % in January.
The turnover was Rs. 172.8 million, well below last year’s daily average of 834 million rupees.
Foreign investors were net sellers of Rs. 35 million worth of shares on Wednesday, extending the year to date net foreign outflow to Rs. 5.1 billion worth of stocks, and Rs. 18.5 billion since the political crisis began on 26 October 2018.
