November 5, 2018 (LBO) – Foreigners continued to exit the Colombo Stock Exchange (CSE) with net foreign selling of over Rs3bn on the day. With the accelerating exit by foreigners out of Colombo’s stock and bond markets, Sri Lanka’s constitutional crisis could very well turn into a financial crisis.

Analysts say that the crisis (unless resolved quickly) is likely to have trade as well as investment ramifications that could cause a collapse of Sri Lanka’s economy. Further weakness in the Sri Lankan Rupee is expected as capital outflows continue on a significant scale.

Sri Lanka is now on the 10th day of an unprecedented constitutional crisis, of which a resolution is not clearly visible. Most of Sri Lanka’s largest trading partners including the US and the EU, have urged the President to convene the Parliament as soon as possible so that the crisis can be resolved before significant hardship is thrust on the populace.