By: LekshmiSajeev
The Sri Lankan rupee fell for the seventh straight session on Friday (3) on dollar demand from banks amid continued security alerts on possible further attacks after the Easter Sunday bombings.
Stocks closed lower for the second time in seven sessions.
Sri Lanka’s Catholic churches have cancelled Sunday mass in the capital Colombo for a second week, citing foreign intelligence warnings of threats to worshippers in the wake of the deadly Easter bombings on churches and hotels.
The rupee fell 0.3 per cent to 177.15/177.60 per dollar from Thursday’s (2) close of 176.60/177.00, Definitive data showed.
Analysts fear it could weaken further due to outflows from stocks and government securities.
The island’s currency lost one per cent this week, but is up 3.2 per cent this year, as exporters converted dollars after investor confidence stabilised following the country repaid a $1 billion sovereign bond in mid-January.
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 3.3 bn rupees worth of government securities in the week ended April 30, extending the net foreign outflow to 10 billion rupees from the securities so far this year, the latest central bank data showed.
The benchmark stock index ended 0.37 per cent lower on Friday at 5,438.75. It hit its lowest close since Dec. 7, 2012, on April 23 and also posted its biggest percentage fall since February 14, 2012, on the same day.
Turnover was 111.1 million rupees ($627,152), lower than this year’s daily average of 580.2m rupees. Last year’s daily average was 834m rupees.
Foreign investors sold a net 17.7m rupees worth of shares on Friday, extending the net foreign outflow to 4.37 bn rupees worth of equities so far this year.
The latest instability follows Sri Lanka’s plunge into political turmoil in October last year, when president Maithripala Sirisena abruptly removed prime minister Ranil Wickremesinghe and then dissolved parliament.
A court later ruled the move 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.
