2 October 2019 12:01 am
(Colombo) REUTERS: Sri Lanka’s rupee closed weaker yesterday, following continued demand from importers and banks, while equities ended lower for the third straight session.
The rupee ended 0.11 percent weaker at 182.20/40 per dollar compared to Monday’s close of 182.00/10. The rupee fell 0.41 percent last week. However, the currency is up 0.22 percent this year.
The International Monetary Fund (IMF) cut its forecast for Sri Lanka’s 2019 economic growth to 2.7 percent from 3.5 percent, as the Easter Sunday attacks on hotels and churches earlier this year dented tourism and broader business activity.
Foreign outflows from government securities, one of the major reasons behind the rupee’s recent weakness, may not abate till the end of parliament elections in 2020, some analysts said.
The Central Bank does not release foreign trade numbers on a daily basis, but weekly data in the past four weeks has shown a steady outflow.
Foreign investors sold government securities worth Rs.439 million in the week ended September 25, data showed, extending the net foreign outflow so far this year to Rs.55.3 billion through September 25, the Central Bank data showed.
The benchmark stock index ended 0.08 percent down at 5,733.64. The bourse fell 0.38 percent last week. So far this year, the index has dropped 5.3 percent.
The index rose in a couple of sessions last week, after the Central Bank said on Tuesday that the Monetary Board had ordered banks to reduce interest rates on all loans and advances by at least 200 basis points by October 15.
Equity market turnover was Rs.214.4 million (US$1.18 million), well below this year’s daily average of about Rs.658.5 million. Last year’s daily average was Rs.834.0 million.
Foreign investors were net buyers of Rs.4.6 million worth of shares on Tuesday, but they have been net sellers of Rs.2.57 billion of equities so far this year, according to index data.