ECONOMYNEXT - The Sri Lanka rupee closed marginally weaker against the US dollar on Wednesday while gilt yields see-sawed and stocks closed 0.17 percent lower on selling in banking stocks, brokers and dealers said.
The rupee closed weaker at 159.50/80 rupees against the US dollar in a dull day of trading in the spot market driven by some import demand as exporters continued to hold back conversions, dealers said.
The US dollar closed at 159.60/70 rupees the previous day. Dealers had expected the rupee to stabilise after hitting an all-time low of 159.50/90 on Monday. The central bank has better monetary policy with the market kept short.
On Wednesday, the central bank pumped in 10 billion rupees through an overnight auction. Analysts say the volumes pumped in through auction, which come in the morning can be reduced, and banks should be forced to borrow more through the last resort window late in the day.
In Sri Lanka once pressure develops in the currency, the central bank also buys dollars from the government (an unsterilized purchase), despite the currency pressure, delaying the stabilization of the peg. If the Treasury has dollars all such dollars have to be sold in the market, to come out of the problem, analysts have pointed out.
Gilt yields eased in early trading in the secondary bond market on profit taking before settling close to previous day's levels.
A five-year bond maturing in 2023 was quoted at 10.37/42 percent in early trading down from 10.42/45 percent the previous close, and a ten-year bond maturing in 2028 was quoted at 10.57/67 percent, down from 10.62/70 percent the previous day.
The five-year bond closed Wednesday at 10.40/45 percent and the ten-year bond closed at 10.60/70 percent.
In equities, the Colombo All Share index fell 0.17 percent, down 10.65 points to 6,337.88, and the S&P SL20 of more liquid stocks closed 0.17 percent lower, down 6.06 points to 3,532.09.
Market turnover was 459.84 million rupees, down 47.5 percent from the previous day.
Distilleries (down 50 cents to 21 rupees), LOLC (down 3.60 rupees to 105 rupees) and BRAC Lanka Finance (down 2.80 rupees to 40.60 rupees) weighed down the benchmark index.
John Keells Holdings closed 30 cents lower at 156.20 rupees.
Net foreign selling was 213.18 million rupees, compared to selling of 33 million rupees the previous day.
Foreign selling in Commercial Bank was 251 million rupees, according to Asia Securities. Commercial Bank closed 20 cents lower at 128 rupees.
Crossings, or off-market negotiated trades, amounted to 122.6 million rupees and was 26.6 percent of market turnover.
Four crossings in Commercial Bank amounted to 92.4 million rupees and one in Sampath bank was 30.2 million rupees.
Sampath Bank closed 1.20 rupees lower at 312.70 rupees. (COLOMBO, 13 June 2018)