Rupee slips on importer, bank dollar demand; stocks down

(Colombo) REUTERS: Sri Lanka’s rupee closed slightly weaker yesterday, snapping two straight sessions of gains, due to dollar demand from banks and importers.
Stocks fell 0.5 percent to their lowest close in eight weeks.
The rupee ended at 181.75/90 per dollar yesterday, compared with 181.50/65 in the previous session, market sources said. On January 3, the rupee fell to an all-time low of 183.00 against the dollar.
The currency has appreciated 0.6 percent so far this year, Refinitiv data showed.
It fell 19 percent in 2018, making it one of the worst-performing currencies in Asia, according to Refinitiv data, due to heavy foreign outflows.
The International Monetary Fund last week said it would resume discussions for further disbursal of part of a US $ 1.5 billion loan amid investor worries of heavy debt repayments.
Sri Lanka is struggling to repay its foreign loans, with a record US $ 5.9 billion due this year including US $ 2.6 billion in the first three months. The Central Bank chief said around US $ 5 billion borrowing in the pipeline could help debt repayments.
The rupee has declined 4.8 percent since a political crisis started in October. That crisis had dented investor sentiment and delayed Sri Lanka’s borrowing plans.
A series of credit rating downgrades have made it harder for Sri Lanka to borrow as it faces record high repayments.
The Colombo Stock Index ended 0.49 percent weaker at 5,958.47 yesterday. The benchmark index lost 5 percent in 2018.
Turnover was Rs.793.3 million, less than last year’s daily average of Rs.834 million.

Foreign investors sold a net Rs.46.9 million worth of shares yesterday. They have been net sellers of Rs.15.8 billion worth of stocks since a political crisis began on October 26.
The bond market saw outflows of Rs.86.7 billion between October 25 and January 16, the latest Central Bank data showed.
Foreign investors pulled a net Rs.22.8 billion out of stocks last year, while they net sold Rs.159.8 billion from government securities from January through December 26, bourse and Central Bank data showed.

Leave a Reply

Your email address will not be published. Required fields are marked *