(Colombo) REUTERS: Sri Lanka’s rupee ended weaker yesterday, as banks bought dollars to facilitate stock-related outflows and importer greenback demand, market sources said.
The stock market closed down as foreign investors continued selling for the second straight session yesterday.
The rupee closed at 178.30/40 per dollar, compared with Monday’s close of 177.75/90, market sources said.
The local currency posted a weekly loss of 0.7 percent last week due to importers’ demand in the latter part of the week.
It has risen 2.5 percent so far this year as exporters converted dollars and foreign investors purchased government securities after a statement from the International Monetary Fund (IMF) and government’s US$ 1 billion debt repayment boosted confidence.
Investor confidence in Sri Lanka is stabilizing after the country repaid a US$1 billion sovereign bond in mid-January, the Central Bank Chief said last month. The bond market saw inflows of Rs.11.4 billion in the week ended Feb. 6, recording its third 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.
The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows.
The Colombo Stock Index ended 0.51 percent weaker at 5,930.21 on Tuesday, its lowest close since Nov 23.
Bourse fell 0.3 percent last week, and declined about 1 percent in January.
The turnover was Rs.1.1 billion (US$6.18 million), well above last year’s daily average of Rs.834 million.
Foreign investors were net sellers of Rs.261.4 million worth shares yesterday. They have been net sellers of Rs.4.8 billion worth of stocks so far this year, and Rs.18.2 billion since the political crisis began on Oct. 26, 2018.