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Thursday, 24 January 2019 03:00 - - {{hitsCtrl.values.hits}}
REUTERS: Sri Lanka’s rupee closed slightly weaker on Wednesday due to dollar demand from importers and state banks, while investors remained cautious over debt repayment by the Government.
Stocks edged higher from an eight-week closing low hit in the previous session.
The rupee closed at 182.15/25 per dollar, compared with 182.00/20 in the previous session, market sources said. On 3 January, the rupee fell to an all-time low of 183.00 against the dollar. The currency has depreciated 0.3 % so far this year, Refinitiv data showed.
Worries over heavy debt repayment after a 51-day political crisis have dented investor sentiment as the county is struggling to repay its foreign loans, with a record $5.9 billion due this year including $2.6 billion in the first three months. The Central Bank Chief last week said around $5 billion borrowing in the pipeline could help debt repayments.
The International Monetary Fund last week said it would resume discussions for further disbursal of part of a $1.5 billion loan amid investor worries of heavy debt repayments.
It fell 19 % in 2018, making it one of the worst-performing currencies in Asia, according to Refinitiv data, due to heavy foreign outflows. The rupee has declined 4.9 % since a political crisis started in October. That crisis had dented investor sentiment and delayed Sri Lanka’s borrowing plans. A series of credit rating downgrades after the political crisis have made it harder for Sri Lanka to borrow as it faces record high repayments.
The Colombo Stock Index ended 0.1 % firmer at 5,951.56 on Wednesday. The benchmark index lost 5 % in 2018. Turnover was Rs. 202.5 million ($1.11 million), well below last year’s daily average of Rs. 834 million. Foreign investors were net buyers for a second straight session on Wednesday, buying a net Rs. 20.9 million worth of shares. But they have been net sellers of Rs. 2.4 billion worth of stocks so far this year and Rs. 15.7 billion since a political crisis began on 26 October.
The bond market saw outflows of Rs. 86.7 billion between 25 October and 16 January, the latest Central Bank data showed.
