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Sri Lanka rupee down on dollar buying by foreigners
June 20, 2013 / 12:12 PM / 4 years ago

Sri Lanka rupee down on dollar buying by foreigners

COLOMBO, June 20 (Reuters) - Sri Lanka's rupee fell
on Thursday as foreign investors booked forwards to hedge their
exposure, currency dealers said, amid a trend of foreign
outflows in other Asian peers in the wake of rise in U.S.
Treasury yields. 
    Emerging markets, many of which have been primed by the
cheap Fed cash, saw some of the biggest selling as investors
rushed to the exits on Thursday, after the U.S. Federal Reserve
laid out a timetable for turning off the taps on its $85
billion-a-month bond-buying programme. 
    "Some foreign investors sold their long-term bonds and
shifted to shorter tenure securities to hedge their exposure," a
currency dealer said on condition of anonymity. "We still see a
weaker rupee, with foreign investors selling their bonds." 
    The rupee closed at 128.43/47 to the dollar, 0.2 percent
weaker from Wednesday's close of 128.10/20. 
    The rupee lost 1.6 percent last week. It fell to
129.00/129.10 per dollar in early trades on Friday, its lowest
in more than six months, as foreign investors sold debt as part
of a broader selloff in emerging markets. 
    The local currency has weakened 0.7 percent so far this
year, following a 10.7 percent depreciation in 2012 as the
central bank opted for a flexible exchange rate regime in
February 2012.
    Sri Lanka's main stock index closed flat, but the
turnover hit a more than six-week high due to a block deal in
market heavyweight John Keells Holdings between two
foreign funds, said stockbrokers.
    The bourse ended 0.04 percent, or 2.21 points, firmer at
6,211.44. It hit a near a five-week low on Tuesday on concerns
of a possible pullout by foreign funds, following regional
peers. 
    On Wednesday, sources told Reuters that top conglomerate
Keells will sign a $640 million deal to establish an integrated
hotel complex. 
    Shares in Keells closed 1.7 percent up at 269.50 rupees per
share.
    The market witnessed net foreign outflows of 183 million
rupees ($1.42 million) on Thursday, but foreigners have been net
buyers of 16.04 billion rupees in shares.
    The day's turnover was at 3.48 billion rupees, more than
thrice of this year's daily average of 1.01 billion rupees.
($1 = 128.4750 Sri Lanka rupees)

 (Reporting by Shihar Aneez; Editing by Prateek Chatterjee)

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