Sri Lanka’s currency gained 0.26 per cent this week, and 4.8 per cent so far this year.

The Sri Lankan rupee closed steady on Friday (12) while stocks ended tad firmer in thin trade ahead of a long weekend due to the traditional new year. The currency ended at 174.45/55 to the dollar.

Sri Lanka’s currency, stock, and bond markets will be closed for a holiday on Monday (15) for a public holiday in lieu of traditional new year falling on a Sunday (14).

The island nation’s currency gained 0.26 per cent this week, and 4.8 per cent so far this year, as exporters converted dollars and foreign investors purchased government securities amid stabilising investor confidence after the country repaid a $1 billion sovereign bond in mid-January.

Sri Lanka was plunged into political turmoil in October when president Maithripala Sirisena abruptly removed prime minister Ranil Wickremesinghe and then dissolved parliament. A court later ruled the move was unconstitutional, and Wickremesinghe was reinstalled as premier.

Investor sentiment took a big hit as a result of the 51-day political crisis, leading to credit rating downgrades and an outflow of foreign funds from government securities.

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

Foreign investors sold a net two billion rupees worth of government securities in the week ended April 10, the second weekly fall in six weeks, the latest central bank data showed.

The Colombo Stock Exchange index ended 0.1 per cent firmer at 5,585.30.

The benchmark stock index fell 0.6 per cent this week, recording its first weekly fall in three. The index has declined 7.7 per cent so far this year.

Turnover came in at 184.2 million rupees ($1.06 million)($2.64 million), less than this year’s daily average of 611 million rupees. Last year’s daily average came in at 834 million rupees.

Foreign investors bought a net 1.1 million rupees worth of shares on Thursday (11), but the market has seen a year-to-date net foreign outflow to 6.1 billion rupees worth of equities.

The latest budget aims to increase government spending by 13 per cent in 2019, during which the presidential election must be held, while it has set an ambitious goal to reduce a large fiscal deficit.