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Bloomberg Comment – 26-12-2018

Rupee Edges Up Before Friday’s Rate Decision: Inside Sri Lanka
2018-12-27 03:07:37.667 GMT
By Anusha Ondaatjie

(Bloomberg) — Sri Lanka’s rupee rose ahead of the central bank’s rate decision Friday.

* USD/LKR down 0.1% at 181.65, snapping 13 days of gains; pair reached a record high of 182 on Wednesday

* Central bank to announce rate decision at 7:30am in Colombo on Dec. 28

* “The central bank is unlikely to cut this time, in order to protect reserves and the rupee,” says Dimantha Mathew, head of research at First Capital in Colombo. “Otherwise more foreign selling will be triggered,” he said

* Four analysts surveyed by Bloomberg expect the central bank to hold policy rates at 9%

* Foreign funds bought a net $1.9m of stocks on Wednesday, helping par outflows in December to $25.9m: exchange data; the market is on track for a six month of outflows

* Yield on 11.5% govt bonds due December 2021 rose 3bps to 11.51% on Wednesday