Sri Lankan rupee gets closer to another record low

CEAT Kelani Holdings Managing Director Ravi Dadlani (right) and Lanka Ashok Leyland CEO Umesh Gautham exchange the OEM agreement

October 31, 2006 (LBO) – The Sri Lankan rupee sank further against the U.S. dollar Tuesday on sustained import demand, while share prices stayed in the red in the absence of any market moving news, dealers said. The rupee opened lower at 107.60 against the dollar from Monday’s close of 107.45 and steadily rose to close at 107.95, in the absence of any dollar sales by state banks to shore up the currency.

Dealers expect the currency to cross the psychological 108.00 mark on Wednesday and remain at that level in the run up to the festive season, as importers buy dollars to settle trade bills. The currency has depreciated by over 5.1 percent since the start of the year.

Colombo’s All Share Price index down 0.81 percent or 20.06 points at 2,454.25, while the liquid Milanka Price Index shed 0.76 percent or 24.16 points to close at 3,135.10 on sales of 277.03 million rupees.

Brokers said foreign buying interest in John Keells Holdings pushed its share price up 0.3 percent to 149.00 rupees, while Sri Lanka Telecom closed flat at 23.00 rupees.

However, there was a bit of selling pressure on conglomerate Richard Peiris & Co. shares after a fire broke out at one of its manufacturing plants in Colombo. The stock closed 4.9 percent lower at 78.50 rupees. Company officials say its too early to comment on the damage to the plant or the loss of business. Call rates in brokers markets stayed at 14 percent while the short fall in the money market came down to 3 billion rupees from about 5-billion rupees on Monday.

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