By: LekshmiSajeev
The Sri Lankan rupee ended weaker on Friday (5) due to dollar demand as importers purchased the greenback after the local currency’s recent gains, sources said; while stocks slipped from a 3-1/2-week high hit in the previous session.
The currency dipped 0.1 per cent to end at 174.90/175.00 to the dollar, compared with Thursday’s (4) close of 174.70/85.
Though the island nation’s currency gained only 0.26 per cent on the week, it rose 2.1 per cent in the six sessions ended Tuesday (2).
The currency gained 4.4 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.
Dealers expect the pressure on the rupee to ease with more inward remittances ahead of the Sinhala-Hindu New Year on April 14.
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 bought a net 1.6 bn rupees worth of government securities in the week ended March 27, the fourth net inflow in six weeks, extending year-to-date net foreign buying to 3.3 bn rupees, the latest central bank data showed.
The Colombo Stock Exchange index snapped a six-session winning streak to end 0.57 per cent weaker at 5,621.36 on Friday. The index slipped from its highest close since March 11, hit in the previous session.
The benchmark stock index rose 1.15 per cent during the week, recording its second consecutive weekly gain in nine. The index has declined 7.12 per cent so far this year.
The market awaits some positive news from the third and final vote on the 2019 budget that is underway, market sources said.
(Reuters)
