COLOMBO: The Sri Lankan rupee recovered from a near record low hit in the previous session to end higher on Friday, boosted by mild dollar inflows aided by some inward remittances.
The Colombo Stock Index ended 0.15 percent firmer at 6,067.66 on Friday, clocking its second straight weekly gain.
But its turnover fell to 68.7 million rupees, its lowest since Feb. 24, 2009, and well below last year's daily average of 834 million rupees, as many investors awaited to see the direction following the political turmoil.
The bourse lost 5 percent in 2018. Foreign investors were net buyers of 668,906 rupees ($3,665.24) worth of shares on Friday.
But they have been net sellers of 13.5 billion rupees worth of stocks since the political crisis began. The bond market saw outflows of about 67.6 billion rupees between Oct. 25 and Dec. 26, central bank data showed.
Last year, there were 22.8 billion rupees of outflows from stocks, while government securities suffered a net 159.8 billion rupees of outflows through to Dec. 26, the latest data from the bourse and central bank showed.
The rupee ended at 182.60/80 on Friday, compared with 182.80/90 in the previous session, market sources said. On Thursday, the rupee traded at an all-time low of 183.00 against the dollar. ** The currency fell 19 percent in 2018, making it one of the worst performing currencies in Asia, as heavy foreign outflows from government securities weighed.
The currency has weakened about 5.4 percent since a political crisis began on Oct. 26.
The central bank will stick to an exchange rate policy of cautious intervention at times of excessive volatility in the forex market, central bank chief Indrajit Coomaraswamy said on Wednesday, launching economic policies for 2019.
That policy is designed to maintain the competitiveness of the exchange rate and support the rebalancing of the current account, thereby supporting a gradual buildup of foreign exchange reserves as an external buffer, he added.
President Maithripala Sirisena appointed a cabinet of ministers from his rival party on Dec. 21 after he was forced to reinstate Ranil Wickremesinghe as prime minister, 51 days after he was sacked.
The political crisis is expected to ease, though uneasy relations between the two men could cause fiscal problems, analysts have said.
Parliament has approved 1.77 trillion rupees ($9.39 billion) to meet the first four months of expenditures in 2019 and avert a government shutdown from Jan. 1.
Credit agencies Fitch and S&P downgraded Sri Lanka's sovereign rating in early December, citing refinancing risks and an uncertain policy outlook.
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