Sri Lanka rupee hits new low, stocks down 0.24-pct

ECONOMYNEXT – Sri Lanka rupee hit a new low against the US dollar, while stocks fell 0.24 percent on Monday with foreign buying in Cargills Ceylon, brokers and dealers said.

The rupee weakened to a new low 156.85/90 rupees against the US dollar in the spot market with strong demand from importers, dealers said. The US dollar closed at 156.40/48 rupees on Friday.

The central bank had printed money heavily to push rates down before a New Year season cash demand. While some of the cash was injected through reverse repo deals, which can expire, tens of billions were also permanently injected by terminating term repo deals, which banks can loan them to clients instead of returning to the central bank.

On April 18, 15 billion rupees were injected for 8 days. On April 20, 14 billion rupees was mopped up ovenight through repo auction. On April 23 banks borrowed 9.0 billion rupees of printed money. Usually by this time most festival cash comes back to the system.

Gilt yields were relatively stable on thin trades in the secondary bond market, dealers said.

A five-year bond maturing in 2023 saw  yields move up to 10.00/03 percent in two-way quotes, from the previous closing of 9.95/10.05 percent. 

A ten year bond maturing in 2028 closed at 10.25/30 percent, down from 10.25/35 percent the previous close.

The Colombo All Share index fell 15.80 points to 6,525.17, and the S&P SL20 of more liquid stocks fell 0.10 percent, down 3.71 points to 3,675.52.

Market turnover was 554.8 million rupees, up 24.5 percent from the previous day.





Net foreign buying was 100.5 million rupees, against selling of 5.3 million rupees last Friday.

Foreign buying in Cargills was 28 million rupees, followed by 9 million rupees in Commercial Bank.

Cargills was down 2.40 rupees to 196 rupees and Commercial Bank closed unchanged at 138 rupees.

Distilleries (declining 60 cents to 21.50 rupees), Ceylon Tobacco (falling 5.90 rupees to 1,030.10 rupees), Ceylinco Insurance (down 42.50 rupees to 1,800 rupees) and HNB (down 1.70 rupees to 245.20 rupees) contributed to the benchmark index decline.

One crossing each, or off-market negotiated trades, in Ceylinco Insurance (67.2 million rupees) and Cargills (22.3 million rupees) totalled 89.5 million rupees and accounted for 16 percent of market turnover. (COLOMBO, 23 April, 2018)

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