October 1, 2018 / 11:43 AM / 20 days ago

Sri Lanka rupee extends recovery ahead of rate decision; stocks down

COLOMBO, Oct 1 (Reuters) - ** The Sri Lankan rupee closed firmer on Monday, further recovering from a record low touched last week as banks sold dollars ahead of the central bank’s monetary policy meeting while shares fell for a third straight session to hit a four-and-a-half-year low amid foreign outflows.

** On Friday the rupee touched its all-time low of 169.40 per dollar on importer demand for the greenback and foreign selling in government securities, but intervention by the central bank helped the currency close firmer, market sources said. ** Sri Lanka’s central bank is expected to raise its key interest rates on Tuesday, a Reuters poll showed, to prop up the rupee amid foreign outflows from government bonds and after the U.S. Federal Reserve raised rates last week.

** The rupee ended at 168.90/169.00 per dollar, compared with the previous close of 169.15/30.

** The rupee weakened 4.7 percent in September against the dollar after a 1.2 percent drop in the previous month, and has declined 10.2 percent so far this year.

** The Colombo stock index fell 0.76 percent to 5,817.54, its lowest close since Dec. 18, 2013. The bourse fell 3.6 percent last month and is down 8 percent so far this year.

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** Data from the central bank showed foreign investors sold government securities worth a net 10.2 billion rupees ($60.36 million) in the week ended Sept. 26, the highest since the week to Dec. 6. Sri Lanka has suffered a net outflow of 72.5 billion rupees in securities so far this year.

** Stock market turnover was 177.1 million rupees ($1.05 million) on Monday, its lowest close since Sept 6 and less than a third of this year’s daily average of 784.4 million rupees.

** Foreign investors sold a net 46.1 million rupees worth of shares on Monday, extending the year-to-date net foreign outflow to 5.88 billion rupees worth of equities.

** Shares in Ceylon Cold Stores fell 5.8 percent, while Ceylinco Insurance Plc lost 6.9 percent and Sri Lanka Telecom Plc closed 4.9 percent weaker. ($1 = 169.0000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez)

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