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Rs. 122 b forex loss from stocks, bonds in 2020; smashes 2019 full-year figure

02 Aug 2020

The net foreign outflow from the government securities and stock markets so far in 2020 have exceeded Rs. 122 billion ($ 680 million as per the exchange rate on 30 July), according to the latest data from the Central Bank of Sri Lanka (CBSL) and the Colombo Stock Exchange (CSE). Of the Rs. 122.55 billion net outflow, Rs. 91.85 billion has been from Treasury bills and bonds from 1 January to 24 July. This is a dramatic drop of Rs. 12.8 billion from the figure of Rs. 104.6 billion at the beginning of the year.  At the CSE, shares sold by foreigners were worth Rs. 103.95 billion while purchases were lower at Rs. 73.18 billion at the end of the period from 1 January to 30 July, making up the net outflow figure of Rs. 31 billion. The total net foreign outflow reported in these first seven months is Rs. 50 billion higher than the total net foreign outflow reported in the entirety of 2019, which was Rs. 72 billion.  However, this year’s massive foreign outflow is not unique to the Sri Lankan economy and has been mainly due to the Covid-19 global pandemic, although the scale of the outflow differs from country to country.  The impact of the pandemic started being felt in the Sri Lankan market at the peak of the outbreak in Wuhan, China. Nevertheless, this intensified following the identification of the first Covid-19-positive Sri Lankan in early March and had a tremendous impact on the CSE’s first-quarter performance.


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