Rupee ends higher as exporters, foreign banks sell dollar

(Colombo) REUTERS: Sri Lanka’s rupee ended a tad higher yesterday, as exporters and foreign banks sold dollars, amid government securities’ purchase by foreign investors, market sources said.

The stock market, however, closed slightly weaker, while foreign trading boosted the turnover. 

The bond market saw inflows of Rs.11.4 billion in the week ended February 6, recording its third straight weekly inflow, the latest Central Bank data showed. 

The rupee closed at 177.75/90 per dollar, compared with Friday’s close of 177.90/178.00, market sources said.The local currency posted a weekly loss of 0.7 percent last week due to importer demand in the latter part of the week. 

It has risen 2.7 percent so far this year as exporters converted dollars and foreign investors purchased government securities after a statement from the International Monetary Fund and government’s US $ 1 billion debt repayment boosted confidence. Investor confidence in Sri Lanka is stabilising after the country repaid a US $ 1 billion sovereign bond in mid-January, the Central Bank chief said last month. 

Worries over heavy debt repayment after a 51-day political crisis that resulted in a series of credit rating downgrades dented investor sentiment as the country is struggling to repay its foreign loans.

 The rupee dropped 16 percent in 2018 and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

The Colombo Stock Index ended 0.06 percent weaker at 5,960.62 yesterday. 

Bourse fell 0.3 percent last week and declined one percent in January. 

But the turnover was Rs.3.3 billion, well above last year’s daily average of Rs.834 million and its highest since December 19. 

Foreign investors were net sellers of Rs.1.2 billion worth shares yesterday. They have been net sellers of Rs.4.6 billion worth of stocks so far this year and Rs.17.95 billion since the political crisis began on October 26, 2018.