Rupee strikes 9-month high on inflows

The Sri Lankan rupee rose 0.8 percent to a nine-month closing high yesterday, helped by inflows into government securities and dollar sales by exporters and banks expecting the rupee to strengthen further, currency dealers said.

The rupee closed at 126.20/30 to the dollar from Tuesday’s close of 127.20/30, dealers said.

“There were inflows into T-bonds, while exporters also sold dollar,” a currency dealer said on condition of anonymity.

“On expectation that the foreigners will buy into securities in future and that could result in rupee appreciation, banks and local investors sold dollars.”

Central Bank Governor Ajith Nivard Cabraal told Reuters there will be increase in foreign inflows into government securities in absolute terms, without increasing the 12.5 percent limit for foreigners’ holdings of total outstanding government securities.

The government’s debt office said Sri Lanka could accommodate up to Rs.60 billion ($471.88 million) foreign investment into T-bills and T-bonds this year.

Sri Lankan stocks, meanwhile, edged down from a 13-week high struck the previous day.

The main share index closed 0.12 percent or 6.83 points down, at 5,745.10.

Foreign investors were net sellers of Rs.31.44 million worth shares yesterday in turnover of Rs.497.2 million. Last year, foreign investors were net buyers of a record Rs.38.63 billion worth shares.


(REUTERS)