Rupee firmer on dollar inflows; stocks extend losses

Tuesday, 9 April 2019 00:39 - - {{hitsCtrl.values.hits}}

REUTERS: The rupee ended firmer on Monday due to dollar inflows from foreign remittances ahead of the traditional New Year later this week, sources said, while stocks extended losses into a second session.

After the markets closed on Monday, the Central Bank left its key interest rates unchanged, a widely expected move to boost an economy struggling in the wake of a political crisis.

The currency gained 0.2% to end at 174.60/70 to the dollar, compared with Friday’s close of 174.90/175.

The island nation’s currency gained 0.26% last week, and 4.6% 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 the pressure on the rupee to ease with more inward remittances ahead of the Sinhala-Tamil New Year on 14 April.

The Colombo Stock Exchange index fell for a second straight session on Monday to end 0.46% weaker at 5,595.46. The index further slipped from its highest close since 11 March, hit on Thursday.

The benchmark stock index rose 1.2% last week, recording its second consecutive weekly gain in nine. The index has declined 7.55% so far this year.

Turnover came in at Rs. 690.4 million ($3.96 million), more than this year’s daily average of Rs. 633.2 million. Last year’s daily average came in at Rs. 834 million.

Foreign investors sold a net Rs. 34.3 million worth of shares on Monday, extending the year-to-date net foreign outflow to Rs. 5.8 billion worth of equities.