Rupee hits fresh low for 6th straight session; stocks down

Thursday, 11 October 2018 00:00 - - {{hitsCtrl.values.hits}}

Reuters: The rupee hit a record low for a sixth straight session yesterday as importers and foreign banks bought the dollar amid outflows from Government securities, while stocks ended weaker for a second straight session.

The rupee fell to an all-time low of 171.60 per dollar, surpassing the previous low of 171.00 hit on 9 October amid foreign selling in Government securities and exporter greenback sales, dollar sales by states banks capped the fall, market sources said.

The Central Bank surprised financial markets on 2 October by leaving its key policy rates unchanged, despite heavy pressure on the rupee and foreign outflows from Government securities.

The Central Bank said on 2 October it purchased $ 4 million from the market in the previous day, but it has sold a net $ 184 million to the market so far this year to defend the currency.

The rupee ended at 171.30/50 per dollar, compared with the previous close of 171.00/20.

The rupee has weakened 1.18% so far this month after a 4.7% drop in September against the dollar. It has declined 11.47% so far this year, recording its sharpest fall since 2001.

The Colombo stock index ended 0.14% down at 5,872.02, slipping further away from its highest close since Sept. 20 hit on 8 October. The index fell to its lowest close since 13 December 2013 on 9 October. It fell 3.6% last month and is down 7.8% so far this year.

Data from the Central Bank showed foreign investors sold Government securities worth a net Rs. 1.8 billion ($10.58 million) in the week ended 3 October. Sri Lanka has seen a net outflow of Rs. 74.3 billion in securities so far this year.

Stock market turnover was Rs. 230.5 million ($1.35 million) yesterday, a third of this year’s daily average of Rs. 769.4 million.

Foreign investors were net buyers in 16 sessions. They bought a net Rs. 15.9 million worth of shares yesterday, but have been net sellers of Rs. 6.3 billion worth of equities so far this year.

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