Responsive image
Sinhala site
Sinhala site

POSTED AT 04:47 PM 08-02-2019

Rupee ends firmer; CSE gains

Image Courtesy: Daily News

REUTERS: Sri Lanka’s rupee ended slightly firmer yesterday due to exporter dollar sales, while a trade union strike at customs dampened importer demand for the greenback. 

Stocks snapped a five-session winning streak to end lower as foreign investors exited from risky assets. A strike by Sri Lanka customs officers that left 6,000 containers stranded at the country’s main port and put pressure on food prices, had dampened the demand for dollars from importers.

The rupee closed at 177.65/85 per dollar, compared with Wednesday’s close of 177.70/178.00, market sources said. 

The Colombo Stock Index ended 0.04% firmer at 5,959.79 yesterday, edging up from its lowest close since 23 January hit on Wednesday. Stocks declined 1% in January. 

Turnover was Rs. 797 million ($ 4.49 million), less than last year’s daily average of Rs. 834 million. Foreign investors net sold Rs. 685.1 million worth shares yesterday. They have been net sellers of Rs. 3.4 billion worth of stocks so far this year, and Rs. 16.8 billion since the political crisis began on 26 October 2018. 

The bond market saw inflows of Rs. 924.7 million in the week ended 30 January, the latest Central Bank data showed. 

Rupee posted a weekly gain of 2.8% last week as exporters converted dollars and foreign investors purchased government securities after a statement from the International Monetary Fund (IMF) and Government’s $ 1 billion debt repayment boosted confidence. 

The currency has appreciated 2.8% so far this year. 

Investor confidence in Sri Lanka is stabilising after the country repaid a $ 1 billion sovereign bond in mid-January, Central Bank of Sri Lanka Governor Indrajit Coomaraswamy said last week. 

Worries over heavy debt repayment after a 51-day political crisis that resulted in a series of credit rating downgrades dented investor sentiment as the county is struggling to repay its foreign loans, with a record $ 5.9 billion due this year, including $ 2.6 billion in the first three months. 

The rupee dropped 16% in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

The political crisis had dented investor sentiment and delayed Sri Lanka’s borrowing plans. Sri Lanka had plunged into political turmoil when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved Parliament. Wickremesinghe was later reinstalled as premier. A court ruled the dissolution was unconstitutional.