(Colombo) REUTERS: The Sri Lankan rupee ended weaker yesterday as outflows from government securities and stocks due to political uncertainty raised dollar demand.
Stocks fell for the third session running, hitting a one-week closing low and moving further away from their near two-month closing high hit last week, as the political crisis continued after the speaker of parliament said on Monday he would not recognise President Maithripala Sirisena’s sacking of Ranil Wickremesinghe and appointment of Mahinda Rajapaksa as the prime minister.
Sri Lanka’s parliamentary speaker has called the president’s sacking of the prime minister to bring a former leader back to power a non-violent coup d’etat.
The rupee ended at 174.80/175.10 per dollar yesterday, compared with the previous close of 174.45/60. The rupee has weakened one percent since the political crisis began on October 26.
The rupee hit a record low of 175.65 per dollar on Thursday.
The rupee weakened 3.7 percent in October after a 4.7 percent drop in September against the dollar. It has dropped 13.8 percent so far this year.
Foreigners bought a net Rs.298 million worth stocks yesterday. They have offloaded equities worth Rs.6.8 billion since the political crisis started on October 26.
Since the prime minister’s sudden sacking, Rs.6.7 billion has flowed out of the stock market, while the bond market saw an outflow of around Rs.11 billion between October 25 and 31, the Central Bank data showed.
So far this year, the island nation has seen Rs.16.2 billion in outflows from stocks and Rs.100.8 billion from government securities, bourse and the Central Bank data respectively showed.
The Colombo stock index fell 1.24 percent to 5,987.21, its lowest close since October 31. It hit a near two-month high on Thursday. The bourse rose 4.5 percent last week due to heavy retail investor participation. It has slipped 6 percent so far this year.
Stock market turnover was Rs.1.3 billion yesterday, more than this year’s daily average of Rs.817.1 million.
Shares of conglomerate John Keells Holdings PLC fell 3.3 percent, the country’s biggest listed lender, Commercial Bank of Ceylon PLC, declined 5.1 percent and Hemas Holdings PLC lost 5.8 percent.