Sri Lankan rupee slides to yet another record low vs dollar

Madiha Shakeel December 28, 2018

COLOMBO: The Sri Lankan rupee on Friday fell to record low against the dollar for a sixth straight session, hurt by relentless capital-outflow pressure as political uncertainty gave investors little incentive to hold local assets.

The rupee hit 182.50 on the dollar, according to Refinitiv Eikon data, moving below its Dec. 27 nadir of 182.35. The latest drop in the currency came just after the central bank kept its key monetary policy rates steady.

The island nation was plunged into crisis in October after President Maithripala Sirisena replaced Prime Minister Ranil Wickremesinghe with former president Mahinda Rajapaksa, without the backing of parliament, leading to protests and downgrades of Sri Lanka’s debt.

Wickremesinghe was reinstated as prime minister on Dec. 16, but the political uncertainty continued to dog markets. The rupee has weakened about 5.2 percent since the political crisis began, and has lost 18.8 percent this year, according to Refinitiv Eikon data.

Copyright Reuters, 2018

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