Reuters: The rupee closed weaker yesterday for the third day running as foreign outflows from government securities weighed on the currency, in line with the trend in other emerging markets. Local shares fell. The rupee ended 0.4% weaker at 178.75/179.00 per dollar, compared with Tuesday’s close of 178.00/00, extending the loss in the last three sessions to 0.9%. The currency was down 0.2% for the last week but is up nearly 2.4% this year.
Market sources said foreign investors have been getting out of government securities, as they have in other emerging markets. The decline comes before a central banks monetary policy announcement, which the market expects to be neutral.
Foreign investors bought a net Rs. 0.61 million worth of government securities in the week ended 13 August. But the net foreign outflow year-to-date has been Rs. 28 billion, Central Bank data showed.
The benchmark stock index ended 0.1% weaker at 5,907.74 with improved trading volume. The index posted a loss of 0.82% last week, its first weekly decline in eight.
Investors have been in a wait-and-see mode since the main opposition party named a hard-line former defence chief as its Presidential candidate.
The market has been looking forward to hearing policies from former defence chief Gotabaya Rajapaksa as well as the ruling party’s Presidential candidate, who has yet to be announced, dealers said.
So far this year, the stock index has dropped about 2.4%.
Turnover was Rs. 671.6 million ($ 3.76 million) yesterday, more than this year’s daily average of about Rs. 653.7 million so far. Last year’s daily average came in at Rs. 834 million.
Foreign investors bought a net Rs. 73.2 million worth of risky assets yesterday. They have sold a net Rs. 1.11 billion worth of shares so far this year, market data showed.