Fri, 23 Apr 2021 Today's Paper

Rupee hits record low on Moody’s downgrade, political uncertainty

24 November 2018 12:00 am - 0     - {{hitsCtrl.values.hits}}

A A A

REUTERS - The Sri Lankan rupee fell to an all-time low of 179.95 per dollar yesterday, as Moody’s downgrade of the country’s credit rating in the wake of a political crisis saw more investors dump rupee-denominated assets.


Moody’s downgraded Sri Lanka on Tuesday for the first time since it started rating the country in 2010, blaming the political crisis for aggravating already problematic finances.


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


Sri Lanka’s political crisis took another turn yesterday as all the lawmakers backing newly appointed Prime Minister Mahinda Rajapaksa, who has refused to resign despite losing two confidence votes in the parliament, walked out the parliament in the face of another defeat in a parliament vote.


The political uncertainty remained the main concern of investors due to failure of Rajapaksa and President Maithripala Sirisena in obtaining the parliament majority for their new government, while deposed Prime Minister Ranil Wickremesinghe’s coalition, which claims it has the parliament majority, is denied an opportunity of forming a government.

 

The Central Bank last week unexpectedly raised its key policy rates, in a move aimed at defending a faltering rupee as foreign capital outflows pick up amid an escalating political crisis and rising U.S. interest rates.


The rupee hit a fresh low of 179.95 per dollar yesterday, surpassing its previous low of 179.00 hit on Wednesday. Sri Lanka’s markets were closed on Thursday for a holiday.


The currency ended at 179.90/180.40 per dollar yesterday, compared with 178.70/179.20 in the previous session. It has weakened more than 3.8 percent since the political crisis began on Oct. 26 and more than 17 percent so far this year.


Foreigners sold a net Rs.51.4 million (US$286,511) worth of stocks on Wednesday, extending the outflow worth Rs.7.8 billion since the political crisis started on Oct. 26.


The bond market saw outflows of about Rs.22.9 billion between Oct. 25 and Nov. 14, Central Bank data showed. This year, there have been Rs.17.3 billion of outflows from stocks and Rs.112.8 billion from government securities, bourse and Central Bank data showed.


The 5-year bond yields have risen about 45 basis points since the political crisis unfolded.


The Colombo stock index fell 0.34 percent to 5,929.98 yesterday. It declined 0.41 percent this week following a 0.39 percent fall last week. It has fallen 6.9 percent so far this year. Stock market turnover was Rs.580.8 million yesterday, less than this year’s daily average of Rs.835.8 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




Security Threats Faced by TNA Jaffna District MP Sumanthiran

Two days before the advent of the “Pilava” April New Year on April 12, C

Mannar Bishop Rayappu Joseph was the Voice of the Voiceless

The Easter Sunday bombings of April 21, 2019 and its consequences have caused

“I value my self-respect more than this crown” -Pushpika de Silva

Pushpika de Silva, the winner of the beauty pageant held in Sri Lanka to pick

What is in a meme?

As fun as memes are, what do they mean for our mental health? An expert has a

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.