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Tuesday, 2 April 2019 00:06 - - {{hitsCtrl.values.hits}}
Reuters: The rupee closed firmer for a fifth straight session yesterday, helped by dollar inflows from inward remittances ahead of the traditional New Year celebrations, market sources said, while stocks ended higher. The currency rose 0.4% to end at 174.70/85 to the dollar, up from Friday’s close of 175.35/50.
The island nation’s currency gained 1.95% in the last five straight sessions and 4.5% 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 expect pressure on the currency to ease with more inward remittances ahead of the traditional Sinhala-Hindu New Year on 14 April.
Sri Lanka was plunged into political turmoil in October when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved Parliament. A court later ruled the move was unconstitutional, and Wickremesinghe was reinstalled as premier.
Investor sentiment took a big hit as a result of the 51-day political crisis, leading to credit rating downgrades and an outflow of foreign funds from government securities. The rupee dropped 16% in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows.
Foreign investors bought a net Rs. 1.6 billion worth of government securities in the week ended 27 March, the fourth net inflow in six weeks, extending year-to-date net foreign buying to Rs. 3.3 billion, the latest Central Bank data showed.
The Colombo Stock Exchange index ended 0.19% higher at 5,567.77 yesterday, moving further away from their lowest since 18 December 2012, hit last Wednesday.
The benchmark stock index rose 0.31% last week, recording its first weekly gain in eight weeks. The index has declined 8.2% so far this year.
The market awaits some positive news from the third and final vote on the Budget 2019 scheduled for 5 April, market sources said.
Turnover was Rs. 458.6 million ($ 2.63 million), less than this year’s daily average of Rs. 647.7 million. Last year’s daily average came in at Rs. 834 million.
Foreign investors bought a net Rs. 358.7 million worth of shares yesterday, but they have been net sellers of Rs. 5.7 billion worth of equities so far this year.
The latest Budget aims to increase government spending by 13% in 2019, during which the Presidential Election must be held, while it has set an ambitious goal to reduce a large fiscal deficit.
