Thursday July 18, 2019

Sri Lanka rupee weakens, stocks close steady

Sep 13, 2018 17:29 PM GMT+0530 | 0 Comment(s)

ECONOMYNEXT - The Sri Lanka rupee closed weaker, touching 163 rupees against the US dollar on Thursday as gilt yields edged higher and stocks ended flat, brokers and dealers said.

The rupee closed at 162.85/163.00 rupees against the US dollar in the spot market, foreign selling in government bonds at low volumes and low export conversions, dealers said.

The US dollar closed Wednesday at 162.40/60 rupees. 

The central bank has injected 9.2 billion rupees in printed money until September 26 to help bank give credit without raising deposits at 8.09 percent on September 12 and a further 12.5 billio rupees at only 7.9 percent until the September 27 and prevent overnight rates from moving up. As long as cash is injected at low rates foreign investors in long term bonds will be able to exit without making much of loss.

The International Monetary Fund Resident Representative Eteri Kvintradze said Sri Lanka should maintain a 'flexible exchange rate' to protect reserves.

Analysts have warned the central bank not to engage in term repo auctions to encourage the rupee to fall but force banks to borrow at 8.5 percent and allow the exhcange rate to fall.

Gilt yields edged higher in the secondary market for government bonds.

A five-year bond maturing in 2023 closed at 10.24/27 percent in two-way quotes, up from the previous closing of 10.18/22 percent.

A ten-year bond maturing in 2028 closed at 10.50/70 percent, from the previous closing of 10.48/58 percent.

In equities, Colombo's All Share index gained 0.03 percent, up 1.68 points to 6,060.68, and the S&P SL20 index of more liquid stocks fell 0.10 percent, down 3.26 points to 3,167.42.

Market turnover was 1.7 billion rupees, up from the previous day's turnover of 967.7 million rupees, with one crossing, or off-market negotiated trade, in Dunamis Capital amounting to 1.4 billion rupees.

Janashakthi PLC had purchased 38.3 million shares at 36.60 rupees each, for a 31.14 percent stake in Dunamis Capital, according to a stock exchange filing.

Dunamis Capital (up 16.60 rupees to 35.10 rupees), Dialog (up 20 cents to 12.50 rupees) and DFCC Bank (up 2.40 rupees to 96.50 rupees) contributed to the benchmark index gain.

During the day 61 stocks had gained against 60 that declined.

Net foreign selling was 41.9 million rupees, down from 144.3 million rupees the previous day.

Foreign selling in John Keells Holdings was 30 million rupees. The stocks closed 80 cents lower at 135.10 rupees. (COLOMBO, 13 September 2018)


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