Sri Lanka rupee steady at near historic low
May 01, 2018 12:35 PM GMT+0530 | 0 Comment(s)
ECONOMYNEXT - The Sri Lanka rupee was holding at a record low of 157.75/90 rupees against the US dollar in early trading Tuesday, with gilt yields seen increasing and stocks trading flat, dealers and brokers said.
The rupee was trading at 157.75/90 against the US dollar in the spot market by midday Tuesday on low trading volumes, dealers said. The US dollar closed at 157.80/90 rupees on Friday.
The central bank mopped up 7.5 billion rupees through a reverse repo auction Tuesday, On Friday it permanently killed 19 billion rupees it had printed through Treaury bill purcahses. Some of the money injected trhough reverse repo auctions have also been taken back.
The central bank triggered a small run on the rupee by printing billions of rupees to enforce a rate cut and make easy money available below the ceiling policy rate of 8.50 prcent, with panicked importers buying dollars while exporters stayed in the sidelines. The central bank did not intervene, allowed the rupee to float, which analysts say is the best strategy to follow after printing money.
Until the rate cut the central bank was following a pegged exchange rate regime, buying dollars and sterilizing liqudity (sterilized forex purchasing).
Gilt yields were seen increasing in early trading.
A five year bond maturing in 2023 was trading at 10.15/25 percent in two-way quotes, up from Friday's closing of 10.15/20 percent.
A ten-year bond maturing in 2028 was trading at 10.35/45 percent, up from 10.35/40 percent the previous close.
The Colombo All Share index was up 0.97 points by midday Tuesday to 6,532.03, and the S&P SL20 of more liquid stocks was up 0.06 percent, gaining 2.29 points to 3,662.39.
Market turnover was 294.9 million rupees.
Laugfs Gas gained 1.30 rupees to 28 rupees and Chevron Lubricants was up 1 rupee to 92.30 rupees.
Sampath Bank was up 10 cents to 302 rupees, Union Bank was trading 10 cents lower at 13.90 rupees, and NDB was down 50 cents lower to 134 rupees. (COLOMBO, 01 May, 2018)