March 29, 2019 / 12:38 PM / 3 months ago

Sri Lanka rupee gains 1.5 pct on week; stocks steady

COLOMBO, March 29 (Reuters) - The Sri Lankan rupee closed 0.4 percent stronger on Friday as dollar inflows from inward remittances ahead of the traditional new year celebrations helped bolster the local currency, market sources said, while stocks ended firmer. ** The currency extended gains into a fourth session to end firmer at 175.35/50 to the dollar, up from Thursday’s close of 176.10/25. ** The island nation’s currency gained 1.5 percent for the week. ** The rupee has climbed 4.1 percent this year as exporters converted dollars and foreign investors purchased government securities amid stabilising investor confidence after the country repaid a $1 billion sovereign bond in mid-January. ** Dealers expect pressure on the currency to ease with more inward remittances ahead of the traditional Sinhala-Hindu New Year on April 14. ** Sri Lanka was plunged into political turmoil in October when President Maithripala Sirisena abruptly removed Prime Minister Ranil Wickremesinghe and then dissolved parliament. A court later ruled the move was unconstitutional, and Wickremesinghe was reinstalled as premier. ** Investor sentiment took a big hit as a result of the 51-day political crisis, leading to credit rating downgrades and an outflow of foreign funds from government securities. ** The rupee dropped 16 percent in 2018, and was one of the worst-performing currencies in Asia due to heavy foreign outflows. ** Foreign investors bought a net 3.5 billion rupees worth of government securities in the week ended March 19, the third net inflow in five weeks, turning year-to-date net foreign buying to 1.8 billion rupees, the latest central bank data showed. ** The Colombo Stock Exchange index ended 0.02 percent higher at 5,557.24 on Friday, moving further away from their lowest since Dec. 18, 2012, hit earlier this week. ** The benchmark stock index rose 0.31 percent for the week, recording its first weekly gain in eight weeks. The index has declined 8.2 percent so far this year. ** The market awaits some positive news from the third and final vote on the 2019 budget scheduled for April 5, market sources said. ** Turnover was 326.6 million rupees ($1.86 million), less than this year’s daily average of 650.9 million rupees. Last year’s daily average came in at 834 million rupees. ** Foreign investors bought a net 101.3 million rupees worth of shares on Friday, but they have been net sellers of 6.1 billion rupees worth of equities so far this year. ** The latest budget aims to increase government spending by 13 percent in 2019, during which the presidential election must be held, while it has set an ambitious goal to reduce a large fiscal deficit. ** For a report on global markets, click ** For a report on major currencies, click

$1 = 175.3500 Sri Lankan rupees Reporting by Ranga Sirilal and Shihar Aneez, Editing by Sherry Jacob-Phillips

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