Rupee hits record low; shares fall amid foreign outflows

Friday, 28 September 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee hit a record low on Thursday as foreign investors exited government securities after the US Federal Reserve raised interest rates for a third time this year, while shares fell in thin trade amid foreign outflows.

The rupee hit a new low of 169.40 per dollar on importer demand for the greenback and as foreign banks bought the US currency to facilitate foreign selling in government securities, but intervention by the Central Bank limited the fall, market sources said.

The rupee ended at 169.35/55 per dollar, compared with the previous close of 169.00/20. The previous record low was 169.05 per dollar hit on Wednesday.

The rupee has weakened 4.8% so far this month against the dollar after a 1.2% drop in the previous month, and has declined 10.2% so far this year.

The Colombo stock index fell 0.31% to 5,869.31. The index hit its lowest close since 18 December 2013 on Tuesday.

Data from the Central Bank showed foreign investors sold government securities worth a net Rs. 8.8 billion ($ 52.19 million) in the week ended 19 September, the highest in a while. Sri Lanka has suffered a net outflow of Rs. 63.7 billion in securities so far this year.

Stock market turnover was Rs. 419.8 million on Thursday, around half of this year’s daily average of Rs. 788.7 million.

Foreign investors sold a net Rs. 110.5 million worth of shares on Thursday, extending the year-to-date net foreign outflow to Rs. 5.77 billion worth of equities.