Sri Lankan rupee up after Rajapaksa poll win

Sri Lankan rupee rose to a two-and-half month high on Monday, after former wartime defence chief Gotabaya Rajapaksa won the presidency by a big margin. Rupee ended 0.5% firmer at 179.40/80 per dollar, its highest since Aug. 30. It closed at 180.10/30 on Friday and is up 1.8% so far this year.

Foreign investors were net sellers of riskier assets for an eighth straight session on Monday. They sold a net 391.6 million rupees ($2.18 million) worth of shares on Monday, extending the net foreign outflow from the equities market to 8 billion rupees for the year, according to index data.

The benchmark stock index, which jumped near 1.9% in the early trade, ended 1.8% firmer at 6,129.56, its highest close since Aug. 10, 2018. The bourse rose 1.53% last week, and it is up 1.28% for the year.

Rajapaksa made national security his top priority after being sworn in on Monday at an ancient temple in the north-central city of Anuradhapura, where he received blessings from Buddhist monks. Majority of Sinhala Buddhists voted for him after he campaigned on promises to make the nation safer in the aftermath of the Easter bombings earlier this year.

Standard Chartered Bank (SCB), in a note to investors, said the election outcome was positive for Sri Lanka and reduced political uncertainty, which should boost economic growth.