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Sri Lanka rupee steady

The Sri Lanka rupee ended steady against the US dollar on Tuesday while gilt yields continued to increase and stocks closed 0.33 percent lower amidst foreign buying in Ceylon Cold Stores, dealers and brokers said.

The rupee closed slightly weaker at 57.60/80 rupees against the US dollar in the spot market, dealers said. The US dollar closed at 157.60/70 rupees last Friday.

State banks, usually acting on behalf of the central bank, were selling dollars in the spot market to prop-up the rupee. The central bank is also engaging in moral suasion against forex dealers.

The domestic currency’s recent tumble from 155.40-rupee levels against the US dollar mid April 2018 was due to the central bank printing rupees in excess of seasonal cash demand, which the banking system used to generate new loans and fuel import demand.

The central bank has since mopped up much of the excess liquidity.

Gilts yields rose in the secondary bond market Tuesday, according to First Capital Research.

A five-year bond maturing in 2023 closed at 10.45/55 percent in two-way quotes, up from 10.40/45 percent the previous close.

 A ten-year bond maturing in 2028 closed higher at 10.65/75 percent, up from 10.60/68 percent the previous day.

The Colombo All Share index closed 0.33 percent lower, down 21.17 points to 6,485.57, and the S&P SL20 of more liquid stocks was 0.22 percent lower, down 7.87 points to 3,632.61.

Market capitalisation was 601.7 million rupees, down 55.7 percent from the previous day.

Distilleries (closing 70 cents lower at 21.70 rupees), John Keells Holdings (down 1 rupee to 163 rupees), LOLC (2.30 rupees to 119.30 rupees) and Ceylon Cold Stores (down 11.30 rupees to 974.80 rupees) weighed down the benchmark index.

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