Rupee falls on importers’ dollar demand; stocks decline

19 February 2019 12:21 am - 0     - {{hitsCtrl.values.hits}}

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(Colombo) REUTERS: The Sri Lankan rupee fell 0.6 percent yesterday in a lacklustre trade as importers stepped up dollar purchases, market sources said. 


The stock market also edged lower to a near four-month low despite foreign investors buying the island nation’s 
risky assets. 


The rupee settled at 179.80/180.00, compared with Friday’s close of 178.65/85, market sources said.


They said importers bought dollars, which were in short supply due to a holiday in the US, as they expect heavy demand when the market reopens on Wednesday after a public holiday. 


The local currency had posted a weekly loss of 0.42 percent in the last week due to high dollar demand from importers and outflows from the stock market. 

It has risen 1.6 percent 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 US $ 1 billion sovereign bond in mid-January.


The bond market saw inflows of Rs.3.3 billion in the week ended February 13, 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 will bring forward a plan to raise US $ 2 billion through the bond market after a delay in a pledged loan from Bank of China, sources close to the deal said yesterday. 


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 Exchange index fell 0.2 percent to 5,897.33 yesterday, its lowest close since October 26. 


The benchmark index had fallen 0.92 percent last week, after losing 0.3 percent in the previous week. It declined about one percent in January. 
The turnover was Rs.530.6 million, less than last year’s daily average of 
Rs.834 million.


Foreign investors were net buyers of Rs.146 million worth of shares yesterday. They have been net sellers of Rs.5.1 billion worth of stocks so far this year and Rs.18.6 billion since the political crisis began on October 26, 2018. 

 

 

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