ECONOMYNEXT \u2013 Foreign investors sold Sri Lanka rupee bonds for a second straight week in the week ended on October 30, Central Bank data showed, amid depreciation pressure on the rupee currency.<\/p>\n
With the latest outflows, the island nation has seen net foreign selling in four of the last 20 weeks.<\/p>\n
Offshore investors sold a net Rs. 8,605 million (US$26.1 million) worth of Sri Lanka rupee bonds in the week ended on October (29).<\/p>\n
The net selling extended the net foreign outflows from the rupee bonds to Rs. 22.4 billion in the last four weeks.<\/p>\n
Despite outflows in the last two week, the island nation has seen a total inflow of around Rs. 49.7 billion into local currency bonds so far this year, following a net inflow of 71.5 billion rupees last year.<\/p>\n
Analysts said foreign investors sold rupee bonds amid downward pressure on the local currency.<\/p>\n
The rupee had been steady for more than three years before the sharp depreciation in May with the Central Bank citing higher oil and vehicle imports amid a lingering conflict in the Middle East.<\/p>\n
The rupee has fallen 6.8 percent through October 30, this year.<\/p>\n
Globally, investors are cautious about economic growth due to the impact of the latest Middle East escalation.<\/p>\n
The rupee has stabilized after the Central Bank raised its key monetary policy rate by 100 basis points in May to curb inflationary pressure stemming from higher demand.<\/p>\n
The island nation has seen an uptick in inflation in the last seven months following a nearly 50 percent hike in fuel prices.<\/p>\n
The government raised fuel prices in the last week of September after reducing them in June and August.<\/p>\n
Before the May rate hike, the Central Bank kept its key policy rates steady since May 2025 after reducing them by 825 basis points over 24 months since June 2023 and foreign investors have been buying rupee bonds. (Colombo\/October 31\/2026)<\/p>","protected":false},"excerpt":{"rendered":"
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