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Bloomberg Comment – 25-06-2018

LKR Seen Supported by Flow From Loan Facility: Inside Sri Lanka
2018-06-25 04:14:45.831 GMT
By Anusha Ondaatjie

(Bloomberg) — The Sri Lankan rupee is likely to find support from expectations of inflows from a loan facility, according to First Capital.

* USD/LKR drops 0.1% to 158.80 after falling 0.4% last week

* A $1b loan facility is expected this week or next, and will give further boost to the currency, says Dimantha Mathew, head of research at First Capital in Colombo

** “We feel foreign outflows from government debt market will also dry up,” helping the currency stabilize around current levels, he says

* Yield on 10% bonds due March 2023 slipped 3bps to 10.42% on Friday: data compiled by Bloomberg

* The government is planning to sell up to $700 million of development bonds with submission bids closing today; settlement date is on July 2

* Overseas investors sold a net $0.5m of local stocks on Friday, paring inflows for this month to $2.8m: exchange data