Rupee hits record low on importer dollar demand; stocks extend gains

5 October 2018 12:15 am - 0     - {{hitsCtrl.values.hits}}

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(Colombo) REUTERS: The Sri Lankan rupee hit a record low for a second straight session yesterday due to dollar demand from importers and foreign banks amid outflows from government securities, while stocks rose for a second consecutive session.


The rupee fell to its all-time low of 170.10 per dollar, surpassing the previous low of 169.90 hit on Wednesday, on importer demand for the greenback and foreign selling in government securities, market sources said. 


The Central Bank surprised financial markets on Tuesday by leaving its key policy rates unchanged, despite heavy pressure on the rupee and foreign outflows from government securities. 

The Central Bank said on Tuesday it purchased US $ 4 million from the market in the previous day, but it has sold a net US $ 184 million to the market so far this year to defend the currency. The rupee ended at 170.05/20 per dollar, compared with the previous close of 169.80/90.


The rupee has weakened 0.5 percent so far this month after a 4.7 percent drop in September against the dollar. It has declined 10.69 percent so far this year. The Colombo stock index ended 0.37 percent firmer at 5,835.60, further moving away from its lowest close since Dec. 13, 2013 hit on Tuesday. It fell 3.6 percent last month and is down 8.4 percent so far this year.


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Data from the Central Bank showed foreign investors sold government securities worth a net Rs.10.2 billion (US $60.36 million) in the week ended Sept. 26, the highest since the week to Dec. 6. 


Sri Lanka has seen a net outflow of Rs.72.5 billion in securities so far this year.


Stock market turnover was Rs.319 million (US $1.88 million) yesterday, less than half of this year’s daily average of Rs.779.7 million.


Foreign investors sold a net Rs.97.3 million worth of shares yesterday, extending the year-to-date net foreign outflow to Rs.6.1 billion worth of equities.

 

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