Rupee ends firmer on remittances, but remains under pressure

1 December 2018 12:01 am - 0     - {{hitsCtrl.values.hits}}

A A A

(Colombo) REUTERS: The Sri Lankan rupee closed firmer yesterday as banks sold dollars due to month-end inward remittances, but the currency is still under pressure as investors continue to dump rupee-denominated assets on a credit rating downgrade and a delay in an IMF loan discussion in the wake of a political crisis.
Foreigners sold a net Rs.415.1 million (US $2.33 million) worth of stocks yesterday, and they have been net sellers of Rs.8.7 billion since the political crisis started on Oct. 26. The bond market saw outflows of about Rs.34.2 billion between Oct. 25 and Nov. 28, the Central Bank data showed.


This year, there have been Rs.18.1 billion of outflows from stocks and Rs.123.2 billion from government securities, the latest data from the bourse and Central Bank data showed.


The rupee ended at 178.80/179.20 per dollar yesterday, compared with 179.70/180.00 in the previous session. 

 

It has weakened around 3.2 percent since the political crisis began. The currency fell 1.8 percent in November and 16.4 percent so far this year.
The rupee hit a record low of 180.85 per dollar on Wednesday, surpassing its previous low of 180.50 hit on Tuesday.


Moody’s downgraded Sri Lanka last week for the first time since it started rating the country in 2010, blaming the political turmoil for aggravating its already problematic finances.


The downgrade coincided with a decision by the International Monetary Fund to delay discussions on its loan tranche to Sri Lanka.


The political standoff took another turn yesterday as the parliament voted to halt payment of ministers’ salaries and travel expenses, but it remained unclear how the move would impact the disputed government of Prime Minister Mahinda Rajapaksa whose ministers boycotted the vote.


The new government has not been recognised by any foreign countries because they have not proven their parliament majority. 


The political paralysis remains the main concern of investors. While Rajapaksa and President Maithripala Sirisena have failed to win support in parliament for their new government, the deposed Prime Minister Ranil Wickremesinghe’s coalition, which claims it does have majority support in parliament, has not been allowed to try to form a government.The political impasse could be set to drag on longer after President Sirisena said on Sunday he would not reinstate Wickremesinghe as prime minister even if he was able to prove his majority in parliament.


The Central Bank on Nov. 14 unexpectedly raised its main interest rates to defend the rupee, which has faltered as foreign capital outflows pick up due to the domestic crisis as well as rising U.S. interest rates. 


Five-year government bond yields have risen 60 basis points since the crisis unfolded on Oct. 26.


The Colombo stock index rose 0.44 percent to 6,019.33 on Friday. It rose 1.5 percent this week, recording its first weekly gain in four. It gained 1.1 percent in November and has declined 5.5 percent so far this year.


Stock market turnover was Rs.1.4 billion yesterday, more than this year’s daily average of Rs.833.9 million.

 

 

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

  Comments - 0

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.

 

 

Add comment

Comments will be edited (grammar, spelling and slang) and authorized at the discretion of Daily Mirror online. The website also has the right not to publish selected comments.

Reply To:

Name - Reply Comment




Employees’ health and safety our top-most priority - Brandix

When inquired, Brandix Apparel Limited said that health and safety of employe

“Workers who fainted had water sprinkled on their faces and had to work again”

Health authorities believe the first reported Covid-19 infected worker from t

“Social media ruined us” - husband of Minuwangoda Brandix factory worker

The Minuwangoda Brandix factory worker who first tested positive for Covid-19

Last rites far from home

The body of the Sri Lankan migrant worker Bandu who died of coronavirus in Du

See Kapruka's top selling online shopping categories such as Toys, Grocery, Flowers, Birthday Cakes, Fruits, Chocolates, Clothing and Electronics. Also see Kapruka's unique online services such as Money Remittence,News, Courier/Delivery, Food Delivery and over 700 top brands. Also get products from Amazon & Ebay via Kapruka Gloabal Shop into Sri Lanka.