Rupee extends recovery ahead of rate decision; stocks down

2 October 2018 12:01 am - 0     - {{hitsCtrl.values.hits}}

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(Colombo) REUTERS: The Sri Lankan rupee closed firmer yesterday, further recovering from a record low touched last week as banks sold dollars ahead of the Central Bank’s monetary policy meeting while shares fell for a third straight session to hit a four-and-a-half-year low amid foreign outflows.


On Friday, the rupee touched its all-time low of 169.40 per dollar on importer demand for the greenback and foreign selling in government securities, but intervention by the Central Bank helped the currency close firmer, market sources said.


Sri Lanka’s Central Bank is expected to raise its key interest rates today, a Reuters poll showed, to prop up the rupee amid foreign outflows from government bonds and after the US Federal Reserve raised rates last week.

The rupee ended at 168.90/169.00 per dollar, compared with the previous close of 169.15/30.


The rupee weakened 4.7 percent in September against the dollar after a 1.2 percent drop in the previous month, and has declined 10.2 percent so far this year.


The Colombo stock index fell 0.76 percent to 5,817.54, its lowest close since December 18, 2013. The bourse fell 3.6 percent last month and is down 8 percent so far this year.


Data from the Central Bank showed foreign investors sold government securities worth a net Rs.10.2 billion in the week ended September 26, the highest since the week to December 6. Sri Lanka has suffered a net outflow of Rs.72.5 billion in securities so far this year.


Stock market turnover was Rs.177.1 million yesterday, its lowest close since September 6 and less than a third of this year’s daily average of Rs.784.4 million.


Foreign investors sold a net Rs.46.1 million worth of shares yesterday, extending the year-to-date net foreign outflow to Rs.5.88 billion worth of equities.


Shares in Ceylon Cold Stores fell 5.8 percent, while Ceylinco Insurance PLC lost 6.9 percent and Sri Lanka Telecom PLC closed 4.9 percent weaker.

 

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