Stock market plunges after CB devalues rupee

RUETERS: Sri Lankan shares fell 4 percent to a near four-month low yesterday after the country’s Central Bank devalued the rupee in a move seen as a step towards securing an International Monetary Fund loan programme and help negotiate debt restructuring. Late on Monday, the Central Bank of Sri Lanka, with immediate effect, set an exchange rate limit of Rs. 230 per dollar compared to a limit of Rs. 200-203 that had prevailed since October. 

Surging crude prices also put inflationary pressure on the island nation, which is facing its worst financial crisis in a decade with foreign exchange reserves shrinking.
Oil prices rose yesterday, with Brent surging past US$ 127 a barrel, as the possibility of formal U.S. sanctions against Russian oil exports spurred concerns over supply.
The CSE All-Share index ended down 3.99 percent at 10,523.03, their biggest intraday percentage loss since Feb. 24.

The Central Bank’s move to impose greater flexibility in the exchange rate pulled down the stock market, First Capital Research said in a note.

Commercial Leasing and Finance PLC and conglomerate LOLC Holdings were the top drags, closing 20 percent and 7.8 percent down, respectively.
Foreign investors were net buyers in the equity market, picking up shares worth Rs,104.23 million, exchange data showed.

Equity market turnover was Rs.3.48 billion.

Trading volume rose to 305.4 million shares from 102.9 million shares in the previous session.