Sri Lanka's coalition government will seek to stoke exports and employment through support for the small business sector in its 2018 budget, a move that is likely keep the island nation's fragile public finances under pressure.
"Investors waited for the budget. A state bank offered dollars", a currency dealer said asking not to be named. The spot rupee closed at 153.33/40 per dollar, compared with Tuesday close of 153.40/45.
Sri Lankan Finance Minister Mangala Samaraweera on Thursday presented an environment-friendly budget for 2018, keeping in line with the country's worldwide commitments on climate change.
Sri Lanka imposed new taxes on motor vehicles, telecoms, banks and liquor to boost revenue in its 2018 budget presented on Thursday, as the budget deficit for the current year slipped to 5.2 percent of the gross domestic product. "But we have not seen any such measures", said Prashan Fernando, CEO at Acuity Stockbrokers.
Samaraweera said next 3 years will be crucial with debt repayments amounting to nearly 7,000 billion rupees.
The island nation has seen 18.1 billion rupees ($117.92 million) worth of net inflows into equities this year as of Wednesday's close, and 42.7 billion rupees into government securities as of November 1, official data showed.