Categories: Business

Foreign outflows from Sri Lanka govt. bonds settling after rate cut, says Central Bank

(Colombo) REUTERS: Outflows from Sri Lanka’s government securities have been settling after the Central Bank’s rate cut last month, the Central Bank’s senior Deputy Governor Nandalal Weerasinghe said yesterday, amid market concerns over more foreign bond selling.
Currency dealers say the August 23 rate cut has accelerated foreign outflows, and the rupee has fallen 0.7 percent since then, mainly due to foreign selling of government securities.
Concerns over heavy outflows have weighed down on the rupee due to possible further outflows after the rate cut, but Weerasinghe downplayed the concerns.
“The truth is that outflows have decelerated after the rate cut and now settled,” Weerasinghe told Reuters, adding that the outflow before the rate cut was higher than that after the rate cut.
Offshore investors offloaded government securities worth of Rs.25.2 billion in the two weeks to August 28 data showed, extending the year-to-date net foreign outflow to Rs.53.2 billion.
“Recent capital flow movements are mainly driven by global market development as experienced by several emerging market economies,”
Weerasinghe said.
The Central Bank does not release daily foreign flow data and weekly data is released with a two-day lag.
Foreign investors sold Rs.12.9 billion worth government securities in the week ended Aug. 21 – the worst weekly outflows in eight months, while they offloaded Rs. 12.3 billion worth government bonds in the following week through Aug. 28. The next weekly outflow data will be released today and Weerasinghe declined to comment on outflows for the week ended Sept. 4.
The Central Bank on Aug.23 lowered rates for the second time in four months to boost sluggish growth after tourism and investments plummeted following the deadly Easter Sunday bomb attacks by Islamist militants.

Lankanewspapers

Leave a Comment
Share
Published by
Lankanewspapers
5 years ago

Recent Posts

LNP – President calls on state employees to fulfill people’s aspirations

President Anura Kumara Dissanayake stated that if the current government fails to meet the expectations…

1 day ago

LNP – Discrepancies in issuance of permits to expatriate workers to import electric vehicles

There have been abuses in the issuance of permits for expatriate workers to import electric…

1 day ago

LNP – Third review approved by IMF, SL to get next US$ 333 million tranche

The International Monetary Fund (IMF) reached a staff level agreement with Sri Lankan authorities, paving…

1 day ago

LNP – Sri Lanka: One of the best ethical and sustainable sourcing destinations

Sri Lanka Embassy in Brussels participated at the European Parliament “Fair Trade Breakfast-2024”, on 13…

3 days ago

LNP – Jetstar Asia eyes Colombo as key market for regional growth and tourism

etstar Asia yesterday launched its Colombo-Singapore direct route positioning itself as the only low-cost carrier…

3 days ago

LNP – Sri Lanka revealed as most popular solo travel destination for 2025

Solo travellers are getting older and are increasingly drawn to Asian destinations – with Sri…

3 days ago