COLOMBO: The Sri Lankan rupee ended weaker on Friday due to dollar demand as importers purchased the greenback after the local currency's recent gains, sources said; while stocks slipped from a 3-1/2-week high hit in the previous session.
** The currency dipped 0.1 percent to end at 174.90/175.00 to the dollar, compared with Thursday's close of 174.70/85.
** Though the island nation's currency gained only 0.26 percent on the week, it rose 2.1 percent in the six sessions ended Tuesday.
** The currency gained 4.4 percent so far this year, as exporters converted dollars and foreign investors purchased government securities amid stabilising investor confidence after the country repaid a $1 billion sovereign bond in mid-January.
** Dealers expect the pressure on the rupee to ease with more inward remittances ahead of the Sinhala-Hindu New Year on April 14.
** Sri Lanka was plunged into political turmoil in October when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved parliament. A court later ruled the move was unconstitutional, and Wickremesinghe was reinstalled as premier. ** Investor sentiment took a big hit as a result of the 51-day political crisis, leading to credit rating downgrades and an outflow of foreign funds from government securities. ** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows.
** Foreign investors bought a net 1.6 billion rupees worth of government securities in the week ended March 27, the fourth net inflow in six weeks, extending year-to-date net foreign buying to 3.3 billion rupees, the latest central bank data showed.
** The Colombo Stock Exchange index snapped a six-session winning streak to end 0.57 percent weaker at 5,621.36 on Friday. The index slipped from its highest close since March 11, hit in the previous session.
** The benchmark stock index rose 1.15 percent during the week, recording its second consecutive weekly gain in nine. The index has declined 7.12 percent so far this year.
** The market awaits some positive news from the third and final vote on the 2019 budget that is underway, market sources said.
** Meanwhile, Sri Lanka's central bank is expected to leave its key interest rates steady on Monday, a Reuters poll showed, but analysts aren't ruling out an easing as the rupee steadies and policymakers aim to boost economic growth ahead of elections.
** Turnover came in at 219.98 million rupees ($1.26 million), less than this year's daily average of 632.3 million rupees. Last year's daily average came in at 834 million rupees. ** Foreign investors sold a net 7.3 million rupees worth of shares on Friday, extending the year-to-date net foreign outflow to 5.8 billion rupees worth of equities.
** The latest budget aims to increase government spending by 13 percent in 2019, during which the presidential election must be held, while it has set an ambitious goal to reduce a large fiscal deficit.
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