Falling Lankan rupee hits all-time low

COLOMBO, Nov 26 (Reuters): The Sri Lankan rupee fell to an all-time low of 179.95 per dollar, as Moody's downgrade of the country's credit rating in the wake of a political crisis saw more investors dump rupee-denominated assets.

Moody's downgraded Sri Lanka last week for the first time since it started rating the country in 2010, blaming the political crisis for aggravating already problematic finances.

The downgrade coincided with a decision by the International Monetary Fund to delay discussions on its loan tranche to Sri Lanka.

Sri Lanka's political crisis took another turn on Friday as all the lawmakers backing newly-appointed prime minister Mahinda Rajapaksa, who has refused to resign despite losing two confidence votes in the parliament, walked out the parliament in the face of another defeat in a parliament vote.

The political uncertainty remained the main concern of investors due to failure of Rajapaksa and President Maithripala Sirisena in obtaining the parliament majority for their new government, while deposed prime minister Ranil Wickremesinghe's coalition, which claims it has the parliament majority, is denied an opportunity of forming a government.