REUTERS - The Sri Lankan rupee fell for the fourth straight session yesterday, weighed down by foreign outflows from government securities and tracking other emerging currencies. Stocks closed steady.
The rupee ended 0.36 percent weaker at 179.40/60 per dollar, compared with Wednesday’s close of 178.75/179.00, extending the loss in the last four sessions to 1.25 percent. The currency was down 0.2 percent in the last week but is up nearly 2 percent this year.
Market sources said foreign investors have been exiting Sri Lankan government securities, echoing the trend in other emerging markets. The Central Bank is due to make a monetary policy announcement today that the market expects to be neutral.
Foreign investors bought a net Rs.0.61 million of government securities in the week ended Aug. 13, against year-to-date net foreign outflows of Rs.28 billion, Central Bank data shows.
The benchmark stock index ended steady at 5,905.02. The index posted a loss of 0.82 percent last week, its first weekly decline in eight. Sri Lanka investors have been mainly in a wait-and-see mode since the main opposition party named a hardline former defence chief as its presidential candidate.
The market has been awaiting details of former defence chief Gotabaya Rajapaksa’s campaign as well as the identity of the ruling party’s presidential candidate, who has yet to be announced, dealers said.
So far this year, the stock index has dropped about 2.4 percent.
Equity market turnover was Rs.586.6 million Sri Lankan (US$3.27 million) yesterday, less than this year’s daily average of about Rs.653.3 million so far. Last year’s daily average was Rs.834 million.
Foreign investors sold a net Rs.26.1 million of stocks yesterday. They have sold a net Rs.1.14 billion so far this year, market data showed.