Rupee hits record low amid political turmoil

REUTERS: The Sri Lankan rupee fell to a record low of 176.15 to the U.S. dollar yesterday, surpassing the 175.90 hit in the previous session, amid political uncertainty triggered by President Maithripala Sirisena’s decision to dissolve parliament.

Stocks closed higher, led by John Keells Holdings, a day after the conglomerate announced a share buyback.

However, after the market closed, the Supreme Court stayed Sirisena’s decision to dissolve parliament until next month in a further twist in the country’s political crisis.
The rupee ended at 176.05/30 per dollar yesterday, compared with the previous close of 175.60/75. It has weakened more than 1.7 percent since the political crisis began on Oct. 26 and more than 14.7 percent so far this year. Foreigners bought a net Rs.53.8 million worth stocks yesterday, but have offloaded equities worth Rs.7.7 billion since the political crisis started on Oct. 26.

The bond market saw outflows of about Rs.21 billion between Oct. 25 and Nov. 7, Central Bank data showed. This year, there have been Rs.17.2 billion of outflows from stocks and Rs. 110.8 billion from government securities, bourse and Central Bank data showed. 

The Colombo stock index rose 0.21 percent to 5,993.54 after falling 1.9 percent last week. Heavy retail investor buying had lifted it 4.5 percent in the week before. It has slipped over 6 percent so far this year. Stock market turnover was Rs. 6.7 billion (US$ 38.09 million) yesterday, well above this year’s daily average of Rs.846.9 million.