COLOMBO: Sri Lanka's rupee ended weaker on Tuesday, as banks bought dollars to facilitate stock-related outflows and importer greenback demand, market sources said. The stock market closed down as foreign investors continued selling for the second straight session on Tuesday.
The rupee closed at 178.30/40 per dollar, compared with Monday's close of 177.75/90, market sources said.
The local currency posted a weekly loss of 0.7 percent last week due to importers' demand in the latter part of the week.
It has risen 2.5 percent so far this year as exporters converted dollars and foreign investors purchased government securities after a statement from the International Monetary Fund (IMF) and government's $1 billion debt repayment boosted confidence.
Investor confidence in Sri Lanka is stabilizing after the country repaid a $1 billion sovereign bond in mid-January, the central bank chief said last month.
The bond market saw inflows of 11.4 billion rupees in the week ended Feb. 6, recording its third straight weekly inflow, the latest central bank data showed.
Worries over heavy debt repayment after a 51-day political crisis that resulted in a series of credit rating downgrades dented investor sentiment as the country is struggling to repay its foreign loans.
The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows.
The Colombo Stock Index ended 0.51 percent weaker at 5,930.21 on Tuesday, its lowest close since Nov 23.
Bourse fell 0.3 percent last week, and declined about 1 percent in January.
The turnover was 1.1 billion Sri Lankan rupees ($6.18 million), well above last year's daily average of 834 million rupees.
Foreign investors were net sellers of 261.4 million rupees worth shares on Tuesday.
They have been net sellers of 4.8 billion rupees worth of stocks so far this year, and 18.2 billion rupees since the political crisis began on Oct. 26, 2018.
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