Sri Lanka rupee firmer on dollar sales; stocks end weaker

Reuters: Sri Lanka's rupee rose 0.9 percent on Wednesday on banks' dollar sales from inward remittances, while foreign investors purchased short-term bills. Stocks ended weaker. 

** The rupee closed at 179.30/60 per dollar, compared with Tuesday's close of 180.90/179.15, market sources said. On Jan. 3, the rupee dropped to an all-time low of 183.00 against the dollar. 

** The currency has appreciated 2 percent so far this year. 

 ** Investor confidence in Sri Lanka is stabilising after the country repaid a $1 billion sovereign bond in mid-January, Central Bank of Sri Lanka Governor Indrajit Coomaraswamy told Reuters on Monday. 

 ** However, investors maintained a cautious stance, awaiting cues about the government's borrowing and repayment of foreign loans, analysts told Reuters. The government paid $1 billion five-year sovereign bond borrowing this month. 

** Worries over heavy debt repayment after a 51-day political crisis have dented investor sentiment as the county is struggling to repay its foreign loans, with a record $5.9 billion due this year, including $2.6 billion in the first three months. The central bank chief on Jan. 14 said about $5 billion borrowing in the pipeline could help debt repayments. 

 ** The International Monetary Fund on Jan. 16 said it would resume discussions for further disbursal of part of a $1.5 billion loan amid investor worries of heavy debt repayments. 

** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. 

** The rupee has declined 3.5 percent since a political crisis started in October. The political crisis had dented investor sentiment and delayed Sri Lanka's borrowing plans. 

** Sri Lanka was plunged into political turmoil when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved parliament. A court later ruled the move was unconstitutional. Wickremesinghe was reinstalled as premier. 

** A series of credit rating downgrades after the political crisis made it tough for the island nation to borrow as it faces record high repayments. 

** The Colombo Stock Index ended 0.1 percent weaker at 5,991.29 on Wednesday. The bourse dropped 0.16 percent last week, while the benchmark index lost 5 percent in 2018. 

** Turnover was 736.7 million rupees ($4.11 million), more than last year's daily average of 834 million rupees. 

** Foreign investors net bought 23.4 million rupees worth shares on Wednesday. But they have been net sellers of 2.2 billion rupees worth of stocks so far this year and 15.6 billion rupees since the political crisis began on Oct. 26, 2018. 

** The bond market saw an inflow of 4.7 billion rupees in the week ended Jan. 23. But the market saw an outflows of 81.9 billion rupees between Oct. 25 and Jan. 23, the latest central bank data showed.  

($1 = 179.2000 Sri Lankan rupees) 

 (Reporting by Ranga Sirilal and Shihar Aneez)