Rupee hits record low, stocks settle near 5-year closing trough

Saturday, 20 October 2018 00:10 - - {{hitsCtrl.values.hits}}

Reuters: The rupee fell to a record low of 171.80 per dollar on Friday as banks and importers bought the dollar, while stocks slid to a near five-year closing low in dull trade.

The rupee dropped to an all-time low of 171.80 per dollar, surpassing its previous low of 171.60 hit on 10 October due to foreign selling in government securities and importer demand for the greenback, market sources said.

The rupee ended at 171.60/80 per dollar, compared with its previous close of 171.30/45.

The Central Bank on Wednesday said it has secured a $ 1 billion eight-year loan from China Development Bank.

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 rupee has weakened 1.2% so far this month after a 4.7% drop in September against the dollar. It has declined 11.5% so far this year.

The Colombo stock index fell 0.30% to 5,761.09 points, its lowest close since 28 November 2013. It shed 3.6% last month and is down 9.6% so far this year. Data from the Central Bank showed foreign investors sold government securities worth a net Rs. 6.3 billion ($ 37.04 million) in the week ended 10 October. Sri Lanka has seen a net outflow of Rs. 80.6 billion in securities so far this year.

Stock market turnover was Rs. 204.2 million ($887,200) on Thursday, nearly a quarter of this year’s daily average of Rs. 767.8 million.

Foreign investors were net sellers of Rs. 8.1 million worth of shares on Friday, extending the year-to-date net foreign outflow to Rs. 9 billion worth of equities.

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