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Sri Lanka exchange halts again after 13 per cent plunge

COLOMBO (AFP) – Crisis-hit Sri Lanka’s stock exchange halted again yesterday after a nearly 13 per cent plunge, derailing the bourse’s tentative re-opening after a two-week break aimed at forestalling a market collapse.

The island nation is grappling with its worst economic downturn since independence in 1948, with months of regular blackouts and acute shortages of food and fuel.

Equities have shed nearly 40 per cent of their value since January, with the local currency falling by a similar amount against the greenback in the past month.

Yesterday was the first morning of trade on the Colombo bourse since a weeklong Sri Lankan New Year holiday and a subsequent five-day trading halt after the government hiked interest rates and defaulted on its USD51 billion foreign debt.

The local S&P index fell seven per cent in the opening minute of trade, more than the five per cent needed to trigger an automatic half-hour halt.

Shares continued their rapid slide after a brief resumption, prompting the market to declare a halt to trading for the rest of the day.

Sri Lankan officials were in Washington last week to negotiate with the International Monetary Fund for a bailout, but official sources said there was no immediate prospect of emergency funding from the lender.

Colombo is now banking on further bilateral help from India, China and Japan to help keep the country afloat, a Finance Ministry source told AFP.

Protesters outside the residence of Sri Lanka’s Prime Minister. PHOTO: AFP