November 14, 2018 / 1:06 PM / in 5 months

Sri Lankan rupee hits record low on political uncertainty

COLOMBO, Nov 14 (Reuters) - ** The Sri Lankan rupee fell to a record low of 176.60 to the U.S. dollar on Wednesday, as political uncertainty outweighed the positive impact of a policy rate hike, sources said. ** Stocks closed weaker due to political uncertainty and the policy rate hike. ** Before the market opened, the central bank unexpectedly raised its key policy rates, in a move aimed at defending a faltering rupee as foreign capital outflows pick up amid an escalating political crisis and rising U.S. interest rates.

** Soon after the market opened, the parliament passed a no-confidence motion against newly appointed Prime Minister Mahinda Rajapaksa, a day after the Supreme Court stayed President Maithripala Sirisena’s decree to sack the parliament and call for early general polls, presenting a standoff with the opposition and throwing the country deeper into turmoil.

** The parliament was dissolved on Friday, two weeks after Sirisena sacked Ranil Wickremesinghe as prime minister and appointed former president Mahinda Rajapaksa in his place.

** The rupee ended at 176.50/60 per dollar on Wednesday, compared with the previous close of 176.05/30. 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 26.8 million rupees worth stocks on Wednesday, but have offloaded equities worth 7.7 billion rupees since the political crisis started on Oct. 26.

** The bond market saw outflows of about 21 billion rupees between Oct. 25 and Nov. 7, central bank data showed. This year, there have been 17.1 billion rupees of outflows from stocks and 110.8 billion rupees from government securities, bourse and central bank data showed. ** The Colombo stock index fell 0.77 percent to 5,947.36 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 6.6 percent so far this year. ** For a report on global markets, click here. For a report on major currencies, click ** Stock market turnover was 729.2 million rupees ($4.15 million) on Wednesday, less than this year’s daily average of 846.4 million rupees. ($1 = 175.9000 Sri Lankan rupees) (Reporting by Ranga Sirilal and Shihar Aneez; Editing by Subhranshu Sahu)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below