December 18, 2018 / 12:26 PM / 7 months ago

REFILE-Sri Lankan rupee ends weaker on foreign outflows (Dec 18)

(In Dec. 18 item, corrects spelling of president’s first name in second bullet)

COLOMBO, Dec 18 (Reuters) - ** The Sri Lankan rupee ended weaker on Tuesday amid pressure on the currency due to foreign outflows from bonds and stocks as uncertainty from a lingering political crisis weighed on sentiment.

** The political crisis was expected to ease after President Maithripala Sirisena reinstated Ranil Wickremesinghe, whom he ousted in October and plunged the country into a 51-day crisis.

** Political paralysis remained the main concern for investors since Sirisena abruptly sacked Wickremesinghe and replaced him with Mahinda Rajapaksa, who failed to win a parliamentary majority and resigned on Saturday as a government shutdown loomed.

** Wickremesinghe sworn in as Sri Lanka’s prime minister on Sunday, making a remarkable comeback weeks after being ousted by President Sirisena under controversial circumstances. ** The Sri Lankan rupee strengthened in early trade on Monday, while bond yields dropped as a seven-week political crisis appeared to ebb, but investors took a cautious stance to observe whether Sirisena and Wickremesinghe could work well together.

** Foreigners were net sellers of a net 785 million rupees ($4.37 million) worth of stocks on Tuesday. They have been net sellers of 11.4 billion rupees since the political crisis began on Oct. 26. The bond market saw outflows of about 56 billion rupees between Oct. 25 and Dec. 14, central bank data showed. ** The rupee ended at 180.10/30 per dollar, compared with 179.90/180.00 in the previous session. ** Credit rating agencies Fitch and S&P downgraded Sri Lanka’s sovereign rating early December, citing refinancing risks and an uncertain policy outlook, after Sirisena’s sacking of his prime minister in October triggered the political crisis.

** This year, there have been 20.8 billion rupees of outflows from stocks and 148.2 billion rupees from government securities, the latest data from the bourse and central bank showed.

** The rupee hit a record low of 180.85 to the dollar on Nov. 28. It has weakened about 3.8 percent since the political crisis began. The currency dropped 1.8 percent in November, and has lost 17.1 percent this year. ** Moody’s downgraded Sri Lanka on Nov. 20 for the first time since it started rating the country in 2010, blaming the political turmoil for aggravating its already problematic finances.

** Five-year government bond yields have risen 50 basis points since the political crisis began, while yields on Sri Lanka’s dollar bonds due in 2022, which have risen around a percentage point to 8.0 percent through Friday, fell 0.4 percent to 7.6 percent on Tuesday.

** The Colombo stock index ended up 0.33 percent at 6,047.48 on Tuesday. Turnover was 979.2 million rupees, more than this year’s daily average of 822.3 million rupees.

** For a report on global markets, click here. For a report on major currencies, click

$1 = 179.8000 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez, Editing by Sherry Jacob-Phillips

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