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Tuesday, 15 December 2020 00:33 - - {{hitsCtrl.values.hits}}
Cumulative net outflow from rupee-denominated Government securities rose to $ 523 million in October, the Central Bank said yesterday, but emphasised exposure remained low.
Foreign investment in the Government securities market recorded a marginal net outflow during the month. A net outflow of foreign investment amounting to $ 20 million was recorded in the rupee-denominated Government securities market in October 2020, increasing the cumulative net outflow to $ 532 million during the period from January to October 2020.
This net outflow in October 2020 was a result of a gross inflow of $ 1 million and a gross outflow of $ 21 million.
The total outstanding exposure of foreign investment in the rupee-denominated Government securities market remained relatively small at $ 56 million by end October 2020.
The CSE recorded foreign investments, on a net basis, while foreign loans to the Government increased in October 2020. When considering both the primary market and the secondary market, the CSE recorded a net inflow of $ 21 million in October 2020. This inflow was a result of a large inflow of $ 50 million to the primary market while the secondary market recorded a net outflow of $ 29 million during the month.
On a cumulative basis, the CSE recorded a net outflow of $ 194 million during the 10 months ending October 2020. Meanwhile, long-term loans to the Government recorded a net inflow of $ 185 million in October 2020.
The Sri Lankan Rupee recorded a marginal appreciation of 0.7% during October 2020, despite some volatility demonstrated in the middle of the month. Overall, the rupee recorded a depreciation of 2.4% against the US Dollar so far during the year up to 14 December.
The Central Bank continued to intervene in the domestic foreign exchange market by purchasing foreign exchange in October 2020 as well. As such, the amount the Central Bank absorbed on a net basis in 2020 up to end November increased to $ 305 million.
Meanwhile, reflecting cross-currency movements, the Sri Lankan Rupee depreciated against the Euro, the Pound Sterling, the Japanese Yen and the Australian Dollar, while appreciating against the Indian Rupee in 2020 up to 14 December.
