The rupee gained 1.7 per cent on Tuesday as exporters sold dollars after the International Monetary Fund approved thedisbursement of a long-delayed loan tranche of $ 426.8 million to the Government. The rupee strengthened to 126.00/126.30 a dollar from Monday’s close of 128.25/128.30.
Dealers said the currency strengthened to 125.60 some importer dollar demand curbed the surge. The currency has risen 4.3 per cent since hitting a record low of 131.60 on 19 March.
However, it has fallen 9.4 per cent since the Central Bank stopped defending it on 9 February.
The IMF on Tuesday approved the eighth tranche of Sri Lanka’s $ 2.6 billion loan with waivers after the country adopted a flexible exchange rate and took measures to avert a balance-of-payments crisis.
On Tuesday, the Central Bank said the country’s reserves had increased to $ 6.1 billion after the IMF approval and were enough to cover 3.6 months imports, which should help improve confidence that the monetary authorities could handle a sudden flight of foreign capital.
The stock market edged up 0.3 per cent or 17.95 points to 5,416.65 on Tuesday as the IMF announcement gave some confidence to retail investors while block deals in Commercial Bank of Ceylon PLC, which edged up 0.30 per cent, pushed the turnover.
Analysts said investors still remained cautious of rising interest rates, the direction of rupee and an expected fall in corporate profits.
The day’s turnover was Rs. 1.53 billion ($ 11.93 million), slightly above this year’s daily average of 1.37 billion. Foreign investors were net buyers of 374 million.
The Colombo Bourse is one of the worst performers this year among Asian markets, with a 10.83 per cent loss.
source - www.ft.lk
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