Rupee at record low; stocks up from near 5-year closing trough

(Colombo) REUTERS: The Sri Lankan rupee hit a record low yesterday as banks and importers purchased the U.S. dollar, while stocks edge up from their nearly five-year closing low hit in the previous session.

The rupee dropped 0.4 percent to an all-time low of 172.50 per dollar, surpassing its previous low of 171.80 hit on Friday, mainly due to importer demand for the greenback, market sources said.

The rupee ended at 172.40/60 per dollar, compared with its previous close of 171.60/80.

Sri Lanka has selected China Development Bank for an eight-year US $ 1 billion syndicated loan, the South Asian country’s Central Bank said.
The Central Bank surprised financial markets on October 2 by leaving its key policy rates unchanged despite heavy pressure on the rupee and foreign outflows from government securities.

The rupee has weakened 2 percent so far this month after a 4.7 percent drop in September against the dollar. It dropped 12.4 percent so far this year.

The Colombo stock index ended 0.09 percent firmer at 5,766.00, edging up from its lowest close since November 28, 2013 hit on Friday. It shed 3.6 percent last month, and lost 9.6 percent so far this year.

Data from the Central Bank showed foreign investors sold government securities worth a net Rs.5.3 billion in the week ended October 17. Sri Lanka has seen a net outflow of Rs.85.9 billion in securities so far this year.

Stock market turnover was Rs.214.1 million yesterday, less than a third of this year’s daily average of Rs.765 million.

Foreign investors were net sellers of Rs.59.3 million worth of shares yesterday, extending the year-to-date net foreign outflow to Rs.9.1 billion worth of equities.