Rupee firms on remittances; stocks end steady

Reuters: The Sri Lankan rupee ended stronger on Wednesday as dollar inflows from remittances ahead of the traditional New Year provided support, while stocks closed steady in dull trade. 

Markets shrugged off the Central Bank’s decision on Monday of leaving its key interest rates unchanged, a widely expected move to boost an economy struggling in the wake of a political crisis. 

The currency ended at 174.60/70 to the dollar, compared with Tuesday’s close of 174.75/85. 

The island nation’s currency gained 0.26% last week, and 4.6% 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, however, expect the pressure on the rupee to ease with more inward remittances ahead of the Sinhala-Hindu New Year on 14 April. 

The Colombo Stock Exchange index closed steady at 5,583.58. 

The benchmark stock index rose 1.2% last week, recording its second consecutive weekly gain in nine. The index has declined 7.7% so far this year. 

Turnover came in at Rs. 218.6 million ($1.25 million), around a third of this year’s daily average of Rs. 620 million. Last year’s daily average came in at Rs. 834 million. 

Foreign investors bought a net Rs. 10 million worth of shares on Wednesday, buy they have sold year-to-date net foreign outflow of Rs. 5.9 billion worth of equities.