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Friday January 21st, 2022
Markets

Sri Lanka stock index ends steady after CB says reserves up

ECONOMYNEXT – Sri Lanka stock index steady on Wednesday (29) following the central bank’s statement that its reserves have jumped almost twice compared to a month ago from inflows, brokers said.

Sri Lanka’s foreign reserves had reached 3.1 billion US dollars by December 29, Central Bank Governor Nivard Cabraal said in a twitter.com message. The reserves have plummeted over 70 percent in the first 11 months of the year and have reached 1.6 billion dollars by end November.

“There was sight positivism in the market, but the rose inflows won’t be enough help us to recover from the mess the economy in,” said a Colombo-based analyst.

“ Whatever the government says, it will be forced to go to IMF sooner than later.”

All Share Price Index gained 0.06 percent or 7.48 points to close at 11,915.18, bourse data showed.

The bourse has fallen in the two previous sessions amid concerns over a central bank move to preserve U.S. dollars of tightening foreign exchange liquidity further,

The more liquid S&P SL 20 index, up 0.19 percent or 8.12 points to close at 4,210.76.

Brokers have cautioned on a downside risk of Sri Lanka’s ability to repay its external debts, amid concerns that the island nation’s risk of sovereign debt default is on the rise after the central bank’s expected inflow of 11.45 billion US dollar including exports, remittances, and revenue from tourism did not materialize.

The central bank on Monday ordered licences banks to surrender 25 percent of its foreign currency holdings got through foreign remittances, export proceeds, and foreign currency conversions from individual customers on a weekly basis.

Analysts said the move will further tighten foreign exchange liquidity in the money market, making it more difficult for importers. They also said the central bank’s move showed the desperateness of or foreign currency.

The day’s turnover was 5.8 billion rupees, above this year’s average daily turnover of 4 billion rupees.

Hayleys PLC, Ceylon Tobacco Company and SMB Leasing marginally gained to keep ASPI in the green.

Hayleys PLC gained 4.14 percent to close at 132.00 rupees a share.

Ceylon Tobacco Company gained 1.32 to close at 885.00 rupees a share while SMB Leasing gained 15.00 percent to close at 2.30 rupees a share.

The retail counters that had been moving in the past few days largely remained on red. (Colombo/Dec29/2021)

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