Rupee, Bourse dip

REUTERS: Sri Lanka’s rupee weakened on Tuesday on importer dollar demand and the market expects a further depreciation next month, when the central bank changes policy on oil import payments.

The rupee closed at 128.55/70 compared with Monday’s close of 128.00/20 against the dollar.

The Central Bank, which is building up its depleted reserves, has already said it may stop supplying dollars to pay for oil imports from May; its latest move to allow more rupee flexibility after it refrained from intervening in foreign exchange markets in February.

A currency dealer said state-run oil firm Ceylon Petroleum Company needs $10-$12 million a day to meet payments for imported oil.Already the currency has depreciated 11.1% since the Central Bank stopped defending it on 9 February.

The Sri Lankan stock market lost 0.4% or 22.36 points to 5,412.44 in thin volume, led by conglomerate Cargills Ceylon PLC and Asian Hotels and Properties PLC falling 1.4% and 2.1% respectively.

The day’s turnover was 442 million Sri Lanka rupees ($3.45 million), well below this year’s daily average of 1.33 billion rupees.

The market saw a net foreign inflow of 41.3 million rupees, extending the net foreign buying to 21.2 billion rupees so far in 2012.

The Colombo Bourse is one of the worst performing Asian markets this year, losing 10.9% as investors have been deterred by rising interest rates and uncertain currency movements.