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Sri Lankan rupee falls on uncertainty amid foreign outflow; stocks at near 2-wk low

The Sri Lankan rupee ended weaker on Thursday as outflows from government securities and stocks due to political uncertainty raised dollar demand.

Stocks fell for the fourth straight session, hitting its near two-week closing low and moving further away from their near two-month closing high hit last week, as the political crisis dented sentiment after the speaker of parliament said on Monday he would not recognise President Maithripala Sirisena’s sacking of Ranil Wickremesinghe as prime minister and appointment of Mahinda Rajapaksa in his place.

Sri Lanka’s parliamentary speaker has called the president’s sacking of the prime minister to bring a former leader back to power a non-violent coup d’etat.

The rupee ended at 175.05/20 per dollar on Thursday, compared with the previous close of 174.80/175.10. The rupee has weakened more than 1 percent since the political crisis began on Oct. 26.

The rupee hit a record low of 175.65 per dollar on Nov.1.

The rupee weakened 3.7 percent in October after a 4.7 percent drop in September against the dollar. It has dropped 13.9 percent this year.

Foreigners sold a net 405.8 million worth stocks on Thursday. They have offloaded equities worth 7.2 billion rupees since the political crisis started on Oct. 26. The bond market saw an outflow of about 11 billion rupees between Oct. 25-31, central bank data showed. This year, the island nation has seen 16.6 billion rupees in outflows from stocks and 100.8 billion rupees from government securities, bourse and central bank data respectively showed The Colombo stock index fell 0.95 percent to 5,930.59, its lowest close since Oct. 26. It hit a near two-month high on Nov. 1. The bourse rose 4.5 percent last week due to heavy retail investor participation. It has slipped 6.9 percent so far this year. For a report on global markets, click here and for a report on major currencies, click Stock market turnover was 1.1 billion rupees ($6.30 million) on Thursday, more than this year’s daily average of 818.4 million rupees.

Shares of Hatton National Bank Plc fell 3.5 percent, while, conglomerate John Keells Holidngs Plc ended 1.7 percent down, the country’s biggest listed lender, Commercial Bank of Ceylon Plc, declined 1.9 percent and Sri Lanka Telecom Plc lost 5.2 percent.

Reuters (Source)

Author: TELO Admin