Rupee closes near record low; stocks steady

COLOMBO (Reuters) - The Sri Lankan rupee closed yesterday near a record low hit earlier this week as banks and importers purchased the dollar, while stocks closed flat with higher turnover.

The rupee ended at 172.80/90 per dollar yesterday, compared with its previous close of 172.60/70.The rupee dropped to an all-time low of 173.00 per dollar on Tuesday, surpassing its previous low of 172.50 hit on Monday.

The Central Bank surprised financial markets on Oct. 2 by leaving its key policy rates unchanged despite heavy pressure on the rupee and foreign outflows from government securities.

The rupee has weakened 2.1 percent so far this month after a 4.7 percent drop in September against the dollar. It dropped 12.45 percent so far this year. The Colombo stock index ended 0.03 percent weaker at 5,768.54. It shed 3.6 percent last month, and lost 9.4 percent so far this year.

Data from the Central Bank showed foreign investors sold government securities worth a net Rs.5.3 billion (US$ 30.7 million) in the week ended Oct. 17. Sri Lanka has seen a net outflow of Rs.85.9 billion in securities so far this year.

Stock market turnover was Rs.1.26 billion (US$ 7.30 million) yesterday, more than this year’s daily average of Rs.764.6 million.

Foreign investors were net sellers of shares worth Rs. 277.5 million yesterday, extending the year-to-date net foreign outflow to Rs.9.4 billion worth of equities.