Sri Lankan shares hit 5-wk closing low on rate hike fears
COLOMBO, March 13 (Reuters) – Sri Lankan shares hit a five-week closing low on Monday on worries that the country’s Central Bank would raise interest rates at a meeting next week after the International Monetary Fund urged it to tighten monetary policy, brokers said.
The IMF last week urged Sri Lanka’s Central Bank to be ready to tighten monetary policy if credit growth or inflation does not abate.
The banking regulator is expected to unveil its second monetary policy of the year on March 24.
"The IMF statement on urging the Central Bank for a possible rate hike has weighed on sentiment," said Hussain Gani, deputy CEO at Softlogic Stockbrokers.
Shares of conglomerate John Keells Holding Plc fell 1 percent, while biggest listed lender Commercial Bank of Ceylon Plc ended 1.09 percent weaker.
Foreign investors net bought shares worth Rs61 million (about $403,041), a ninth straight session of purchases, extending the year-to-date net foreign inflow to Rs2.18 billion worth of equities.
Turnover stood at Rs183.3 million, the lowest since February 1 and well below this year’s daily average turnover of Rs679.6 million.
Yields on treasury bills have risen to a more-than-four-year high since October despite the central bank keeping key policy rates steady.