Rupee up on sovereign bond inflow hopes; Bourse down

Saturday, 21 July 2012 02:31 - - {{hitsCtrl.values.hits}}

The rupee strengthened more than 1% against the dollar on Friday due to expectations of further dollar inflows into Government bonds and from the sale of a $ 1 billion euro bond issue, dealers said.

Sri Lanka’s $ 1 billion, 10-year sovereign bond was priced at 5.875% after being oversubscribed more than 10 times.

“Since the oversubscribed sovereign bond issue, we see the rupee strengthening and the confidence coming in,” a dealer said asking not to be named.

The rupee closed at 131.60/80 against the dollar, firmer than Thursday’s close of 133.00/10, dealers told Reuters.

Stocks slipped on Friday despite President Mahinda Rajapaksa, also the Finance Minister, meeting with top officials of the Colombo Stock Exchange, Securities and Exchange Commission and brokerage firms to discuss an ailing market.

The Colombo Stock Exchange’s main index edged down 0.06% or 2.89 points to 4,888.22.

Treasury Secretary P.B. Jayasundera who attended the meeting told Reuters that there was discussion on need for governance and regulation predictability.

Sri Lanka’s $ 13.80 billion stock market has fallen 19.5% since the start of the year on concerns over rising interest rates and a sharp depreciation in the rupee currency.

The day’s turnover was Rs. 284.2 million ($ 2.14 million), well below this year’s daily average of Rs. 915.2 million.

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