Rupee remains at one year peak; stocks up

Thursday, 11 April 2013 01:17 - - {{hitsCtrl.values.hits}}

Reuters: Continued inward remittances and exporter conversions ahead of the traditional New Year propelled the rupee to a fresh one-year closing high on Wednesday, dealers said.

The rupee edged up in dull trade to 125.40/50 to the dollar, its highest close since 9 April 2012, from Tuesday’s close of 125.45/50.

The rupee has been on the rise since mid-March on inflows from remittances and exporter dollar sales ahead of the traditional New Year, which most Sri Lankans will celebrate on 13 and 14 April.

Currency dealers said with an expected inflow of $ 500 million from a bond sale by State-run Bank of Ceylon, the rupee is expected to appreciate in the coming weeks.

The currency has risen 1.6% this year after falling 10.7% in 2012.

The main stock index gained 0.46%, or 26.70 points, to 5,794.30, its highest close since 15 February.

Analysts said hopes of falling interest rates boosted sentiment though the market saw thin trade as many investors were on holiday ahead of the traditional New Year.

Treasury Secretary P.B. Jayasundera on Tuesday said Sri Lanka’s interest rates should fall in May-June as the borrowing needs of loss-making state energy firms recede.

Stockbrokers said the broad market expects the central bank to slash the key monetary policy rates at its April monetary board meeting. The April monetary policy rates will be announced on at 0200 GMT on Tuesday.

Turnover was at an over-two-week low of Rs. 309.4 million, less than half of this year’s daily average of Rs. 1 billion on choppy trade ahead of the traditional New Year holiday.

Foreign investors were net buyers of Rs. 11.4 million worth of shares, extending the year-to-date net foreign inflow to Rs. 5.97 billion ($ 47.56 million). Last year, the bourse saw a net inflow of $ 303 million.