Sri Lanka’s Colombo Stock Exchange halted trading at 10.38 am as an index of liquid stocks plunged more 5 percent in intra-day trading.
The broader All Share Index was down 3.72 percent.
“Please note that the Market has been halted for 30 minutes due to the S&P SL20 index dropping over 5% from the previous close, as set out in SEC Directive dated 30th April 2020,” the Colombo Stock Exchange said in its website.
“The halt will be lifted at 11.08 A.M.”
Sri Lanka stocks have been on the decline since the central bank allowed flexibility in the currency. The currency has fallen over 50 percent so far since it was allowed flexibility on March 7.
Market analysts have expected a long-overdue correction, amid macro-worries.
The stock has been driven by loose monetary policy both at home and abroad. Some stocks have been bought as an inflation hedge with the rupee expected to fall.
Others have also benefited from imports controls.
Sri Lanka’s loose monetary policy however has led to increasing external weakness which has translated into disrupted supplies.