Sri Lanka rupee breaches Rs164 against USD, stocks open 0.32-pct higher

ECONOMYNEXT – The Sri Lanka rupee breached 164 rupees against the US dollar to reach a new low in opening trades Monday as stocks gained 0.32 percent, brokers and dealers said.

The Sri Lanka rupee opened to a new low of 164.10/30 rupees against the US dollar in the spot market on importer demand and lower selling of the greenback by exporters and banks, dealers said.

The US dollar closed Friday at 163.60/80 rupees.

The Central Bank injected about 48.3 billion rupees through term reverse repo auctions since 11 September. The greenback strengthening in global markets was discouraging exporters from converting their holdings as well, dealers said.

The central bank itself had fuelled the idea that global strenthening of the US dollar weakened the peg, after deliberately depreciating the rupee in 2017, when the US dollar weakened and the many East Asian currencies appreciated.

On Friday, overnight market excess liquidity fell by 3.22 billion rupees, to 13.08 billion rupees. The Central Bank had also also sold its government securities holdings by 7.48 billion rupees to 22.62 billion rupees.

Gilt yields edged higher in the secondary bond market for government with foreign investors selling 2.5 billion rupees worth of bonds in the week to 12 September, dealer said.

A five-year bond maturing in 2023 opened marginally lower at 10.25/33 percent in two-way quotes, from Friday’s closing of 10.25/34 percent.

A ten-year bond maturing in 2028 edged lower at 10.45/60 percent, down from the previous close of 10.50/70 percent.

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Equities opened stronger with Colombo’s All Share index gaining 0.32 percent, up 19.28 points to 6,050.54, and the S&P SL20 of more liquid stocks gaining 0.34 percent, up 10.71 points to 3,150.48.

Ceylon Tobacco opened 24 rupees higher at 1,350 rupees and John Keells Holdings gained 1.40 rupees to 135.10 rupees.

Union Assurance was up 24 rupees to 345 rupees. (COLOMBO, 17 September 2018)

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