Sri Lanka rupee close flat after US$136mn interventions,stocks steady

ECONOMYNEXT - The Sri Lanka rupee closed steady against the US dollar on Friday with the cental bank selling over 136 million dollars to defend the currency in recent days after printing money, while gilts and stocks closed flat with foreign selling in Sampath Bank, dealers and brokers said.

The rupee closed steady near a historic low 157.85/158.10 rupees against the US dollar in the spot market, unchanged from the previous close.

Dealers said there was uncertainty in the market with the monetary authority intervening to defend the currency and Central Bank governor Indrajit Coomaraswamy saying forex dealers would be probed.

The rupee fell sharply from 155 rupee-levels in April after the Central Bank printed money to enforce low rates which resulted in excess liquidity fuelling importer demand.

Interventions have so far been unsterilized, with the central bank spending about 100 million dollars net, to mop 15.7 billion rupees of money printed, which pressured the currency. The same effect can be achieved by selling down Treasury bills.

Gilt yields were relatively stable with two-way quotes seen narrowing.

A five-year bond maturing in 2023 closed at 10.42/45 percent in two-way quotes, compared to 10.41/45 percent the previous day.

A ten-year bond maturing in 2028 closed at 10.70/80 percent, with quotes narrowing from 10.65/80 percent the previous day.

The Colombo All Share index closed 0.84 points lower, down 0.01 percent to 6,478.87, and the S&P SL20 of more liquid stocks shed 3.75 points to close 0.10 percent lower at 3,622.11.

Market turnover was 769.5 million rupees, up 24.34 percent from the previous day.

BRAC Lanka Finance (down 15.80 rupees to 51.40 rupees), Dialog (down 20 cents to 14.20 rupees), Commercial Bank (down 1 rupee to 133.10 rupees) and John Keells Holdings (down 30 cents to 162 rupees) weighed down the index.

Net foreign buying was 24.3 million rupees, down from 40.5 million rupees the previous day. Foreign buying in Tokyo Cement was 25 million rupees, followed by 24 million rupees in Nations Trust Bank, according to Asia Securities.

Tokyo Cement closed unchanged at 55 rupees and Nations Trust Bank gained 60 cents to 86.10 rupees.

Foreign selling in Sampath Bank was 38 million rupees. The stock closed 60 cents lower at 299.30 rupees.

Off-market negotiated trades, or crossings, amounted to 236.2 million rupees and was 30.7 percent of market turnover.

Two crossings in Melstacorp amounted to 156.6 million rupees, and one crossing each in Sampath Bank (31.4 million rupees), Tokyo Cement (25 million rupees) and Fist Capital (23.1 million rupees).

Melstacorp closed 40 cents higher at 58 rupees and First Capital was unchanged at 30 rupees. (COLOMBO, 11 May 2018)