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Thursday Nov 14, 2024
Tuesday, 1 January 2019 00:13 - - {{hitsCtrl.values.hits}}
REUTERS: The rupee fell 19% in 2018, making it one of the worst performing currencies in Asia, as heavy foreign outflows from government securities weighed on the local currency.
The Colombo Stock Index ended 0.62% firmer at 6,052.37 on Monday, but lost 5% for this year. Turnover was Rs. 288.5 million, less than half of this year's daily average of Rs. 834 million.
The rupee hit a record low for a seventh straight session on Monday on continued outflows of foreign funds mainly from government bonds as political uncertainty dented investor sentiment. The rupee hit an all-time low of 183.00 against the dollar in early trade, surpassing its previous record of 182.90 marked in the prior session, Refinitiv Eikon data showed. It has weakened about 5.4% since Sri Lanka's political crisis began on 26 October and lost 19% this year.
The rupee ended at 182.80/183.00 per dollar, compared with 182.75/183.25 in the previous session. President Maithripala Sirisena appointed the Cabinet of Ministers from his rival party on 21 December after he was forced to reinstate Ranil Wickremesinghe as Prime Minister, 51 days after he was sacked.
The political crisis was expected to ease, though uneasy relations between the two men could cause fiscal problems, analysts have said. Parliament has approved Rs. 1.77 trillion ($9.39 billion) to meet the first four months of expenditures in 2019 and avert a government shutdown from 1 January.
Foreign investors have been net sellers of Rs. 13.3 billion worth of stocks since the political crisis began. The bond market saw outflows of about Rs. 67.6 billion ($ 370.21 million) between 25 October and 26 December Central Bank data showed.
This year, there have been Rs. 22.8 billion of outflows from stocks, while government securities suffered a net Rs. 159.8 billion of outflows through 26 December, the latest data from the bourse and central bank showed.
Credit agencies Fitch and S&P downgraded Sri Lanka's sovereign rating in early December, citing refinancing risks and an uncertain policy outlook.
