ECONOMYNEXT – Sri Lanka saw offshore inflows into its government securities for the eighth straight week ended on November 7, the Central Bank data showed.
Analysts said investors see some quick profits in the island nations treasury bonds due to possible appreciation in the rupee and fall in market interest rates.
Sri Lanka witnessed 1,896 million rupees ($6.4 million at 1 US dollar = 295 LKR) inflow into government securities in the week ended on November 7, extending the total inflows into treasury bonds and bills to 15.5 billion rupees (($52.4 mln) in the eight straight weeks, the official data showed.
The value of government securities held by foreign investors was at 54,813 million rupees by November 7.
“Foreign investors might be taking a punt on possible rupee appreciation and falling interest rates. This means, they will have capital gain on the dollar conversion when they sell their bonds while they also will get the returns on the coupon rate as well,†a currency dealer told EconomyNext.
Analysts say Sri Lankaâ€s deflationary policies have helped to see inflows amid curtailed imports.
The new inflows also come after Sri Lanka witnessed a peaceful presidential election that elected Marxists Janatha Vimukthi Peramuna (JVP) leader Anura Kumara Dissanayake as the island nationâ€s president for a five-year tenure.
The island nation has not changed its policy directions since Dissanayake was elected.
Dissanayakeâ€s Janatha Vimukthi Peramuna-led National Peopleâ€s Power (NPP) is likely to win the November 14 parliamentary polls and analysts say NPP win could boost the investor confidence as it has not made any drastic policy changes or deviate from the International Monetary Fund loan programme.
Sri Lanka suffered a foreign outflow of 66 percent or 78.1 billion rupees worth government securities in the first nine months of this year. (Colombo/November 12/2024)
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