Foreign holding of Sri Lanka govt securities falls during week

Sept 05, 2015 (LBO) – The holding of Sri Lanka government securities by foreign investors reduced to 350 billion rupees in the week to September 02, from 375 billion rupees in the previous week, information from the central bank showed.

Foreign investors held 457 billion rupees worth of government securities at the beginning of the year. This reflects an outflow of 25 billion rupees for the week, and an outflow of 107 billion rupees so far this year, a dealer at Perpetual Treasuries said.

The percentage of government securities held by foreigners has fallen to around 8.1 percent from 13 percent at its peak. Last week, the total stock of treasury bills and bonds increased to 4,326 billion rupees, from 4,317 billion rupees, the central bank’s weekly indicators showed.

Likely due to turbulent currencies, low interest rates in Sri Lanka and the prospect of tightening monetary policy in the global economy, foreign investors have pulled out of government securities this year.

These outflows and a widened trade deficit may have prompted the central bank to allow a depreciation of the rupee to 137.50/138.00 against the dollar on Friday, from 134.75 on Thursday.