COLOMBO, Nov 13 (Reuters) - Sri Lanka's rupeeedged down on Thursday as 'limited' central bank supporting was inadequate to protect it at 110.00, while shares fell 2 percent on continued earnings and macroeconomic gloom.
The rupee closed at 110.00/20 a dollar, down from Tuesday's close of 110.00. Both currency and stock markets were closed on Wednesday for a Buddhist religious holiday.
The rupee fell around 0.4 percent to 110.40/50 level immediately after the opening of the trade, as Bank of Ceylon, a state bank through which the central bank intervenes, did not offer dollars at 110, traders said.
"The central bank then supported the rupee at 110. The rupee is certainly under pressure. The central bank can't protect the rupee like this for a long time," said a currency dealer.
"According to our estimates, the central bank forex reserve should be around $1.9 billion by now as it has been protecting the rupee aggressively since early September."
Central Bank Governor Ajith Nivard Cabraal, before the market close on Tuesday, told Reuters the reserve had hit $2.65 billion as of that day. The Central Bank at the end of October said the reserve was down by a quarter to $2.6 billion since early September after it defended the rupee at 108 for six weeks.
The central bank on Monday said it expects the currency to stabilise at 110 and it would protect it from depreciation at that level. Cabraal said on Tuesday that the central bank's intervention has been reduced to a nominal level.
The IMF has warned Sri Lanka to let the currency depreciate, trim spending and cut its reliance on expensive foreign borrowing or else risk its economic growth. See [ID:nCOL349986]
The interbank lending rate or call money rateedged down to 18.592 percent from Tuesday's close of 18.745 percent. For secondary market bond and bill rates, please see <0#LKBMK=>.
The Colombo All-Share indexfell 37.00 points to 1,812.08, its fifth straight fall and lowest close since Oct. 30. The bourse hit an over 3-½ year closing low on Oct. 28, and is still down 28.7 percent so far this year.
"The global and local economic concern and gloomy corporate earnings outlook have kept cautious investors away from the market," Shivantha Meepage, a research analyst at HNB Stockbrokers, said.
The top conglomerate by market capitalisation, John Keells Holdings, closed 5.11 percent to 65 rupees, calculated on a weighted average. Its buyback offer of one share to every 25 shares at 90 rupees started on Nov. 4 and goes until Nov. 18.
Market heavyweight and Sri Lanka's top fixed-line phone operator Sri Lanka Telecomfell 1.99 percent to 37 rupees a share, while shares in conglomerate Aitken Spence closed at an over 2-year low of 305 rupees.
Market turnover was 113.9 million rupees ($1.03 million), less than a third of last year's daily average of 400 million. (Editing by Bryson Hull)
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