September 27, 2019 / 12:43 PM / 19 days ago

Sri Lankan shares; rupee ends steady

COLOMBO, Sept 27 (Reuters) - ** Sri Lankan shares ended down on Friday, snapping two straight gaining sessions to record their second weekly fall, while the rupee was little changed as inward remittances offset dollar demand from banks. ** The index rose for the past two sessions after the central bank on Tuesday said that the Monetary Board ordered banks to reduce interest rates on all loans and advances by at least 200 basis points by Oct. 15, 2019. ** The benchmark stock index ended 0.02% down at 5,771.69, taking its weekly fall to 0.38%. So far this year, the index has dropped 4.6%. ** Equity market turnover was 417 million Sri Lankan rupees ($2.29 million), well below this year’s daily average of about 660.3 million rupees. Last year’s daily average was 834 million. ** Foreign investors were net sellers of 54.5 million rupees worth of shares on Friday, extending the year to date net foreign outflow to 2.8 billion rupees of equities, according to index data.

** Meanwhile, the Sri Lankan rupee ended steady as month-end inward remittances were balanced by the International Monetary Fund (IMF) lowering the country’s growth forecast for 2019.

** The rupee closed at 181.85/182.00 to the dollar. The rupee fell 0.41% for the week. However, the currency is up 0.41% on the year. ** The IMF cut its forecast for Sri Lanka’s 2019 economic growth to 2.7% from 3.5%, as the Easter Sunday attacks on hotels and churches earlier this year dented tourism and broader business activity.

** Foreign outflows from government securities, one of the major reasons behind the rupee’s weakness recently, may not see a respite till the end of parliament elections in 2020, some analysts said.

** The central bank does not release foreign flow numbers on a daily basis, but weekly data in the past four weeks has shown a steady outflow.

** Foreign investors sold government securities worth 545.9 million rupees in the week ended Sept. 18, data showed, extending the net foreign outflow so far this year to 54.9 billion rupees through Sept. 11, central bank data showed. ** For a report on global markets, click ** For a report on major currencies, click ($1 = 181.8000 Sri Lankan rupees) (Reporting by Ranga Sirilal, editing by Louise Heavens)

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