Stocks edge up from near 5-year low; rupee ends weaker

Reuters: The rupee ended 0.2% weaker on Tuesday as banks and importers bought the dollar while stocks ended a five-session losing streak, pulling away from previous session’s near five-year closing low.

The rupee ended at 170.90/171.10 per dollar, compared with its previous close of 170.60/75. 

The rupee had fallen to an all-time low of 171.60 per dollar on Wednesday, surpassing the previous trough of 171.00 hit on Tuesday, due to foreign selling in government securities and exporter greenback sales, market sources said. 

The Central Bank surprised financial markets on 2 October by leaving its key policy rates unchanged, despite heavy pressure on the rupee and foreign outflows from government securities. 

The Central Bank said on 2 October it purchased $ 4 million from the market in the previous day, but it has sold a net $ 184 million in the market so far this year to defend the currency.

 The rupee has weakened 1.01% so far this month after a 4.7% drop in September against the dollar. It has declined 11.3% so far this year.

The Colombo stock index rose 0.37% to 5,796.02, edging up from its lowest close since 3 December 2013 hit on Monday. It fell 3.6% last month and is down 9.0% so far this year.

Data from the Central Bank showed foreign investors sold government securities worth a net Rs. 6.3 billion ($ 37.04 million) in the week ended 10 October. Sri Lanka has seen a net outflow of Rs. 80.6 billion in securities so far this year.

Stock market turnover was Rs. 1.6 billion ($ 9.37 million) yesterday, more than twice this year’s daily average of Rs. 775.7 million.

Foreign investors were net sellers of Rs. 499.9 million worth of shares yesterday, extending the year-to-date net foreign outflow to Rs. 8.8 billion worth of equities.