(Colombo) REUTERS: The Sri Lankan rupee hit a record low for a fourth straight session yesterday due to dollar demand from importers and foreign banks amid outflows from government securities, while stocks rose for a fourth consecutive session to a more than two-week closing high.
The rupee fell to an all-time low of 170.75 per dollar, surpassing the previous low of 170.40 hit on Friday, on importer demand for the greenback and foreign selling in government securities and exporter greenback sales, 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 170.50/80 per dollar, compared with the previous close of 170.25/30.
The rupee has weakened 0.89 percent so far this month after a 4.7 percent drop in September against the dollar. It has declined 11.15 percent so far this year, recoding its highest fall since 2001.
The Colombo stock index ended 0.41 percent firmer at 5,908.06, its highest close since September 20 and further moving away from its lowest close since December 13, 2013 hit on Tuesday. It fell 3.6 percent last month and is down 7.2 percent so far this year.
Data from the Central Bank showed foreign investors sold government securities worth a net Rs.1.8 billion in the week ended October 3. Sri Lanka has seen a net outflow of Rs.74.3 billion in securities so far this year.
Stock market turnover was Rs.265 million yesterday, a third of this year’s daily average of Rs.774.6 million.
Foreign investors sold a net Rs.30.4 million worth of shares yesterday, extending the year-to-date net foreign outflow to Rs.6.2 billion worth of equities.