Thirteen-Hour Power Cuts Get Sri Lanka to Shorten Stock Trading

(Bloomberg) -- Sri Lanka's stock market will stay open for fewer hours this week as a shortage of dollars delays fuel imports, forcing the country to impose daily electricity outages and making it hard for businesses to operate.

Trading sessions will run from 10 a.m. to 12:30 p.m. local time at least through Friday, the Colombo Stock Exchange said in a statement, instead of the usual 2:30 p.m. close. The position will be reviewed over the weekend.

Sri Lanka's government on Thursday extended the duration of daily power cuts to 13 hours as diesel supplies ran out, while food and medicine stocks were also hit. The nation is undergoing a severe shortage of dollars, making it hard to pay for food and fuel imports.

Separate data during the day showed headline inflation accelerated to 18.7% in March -- the fastest pace on record under a new series -- boosting the case for more measures from policy makers to temper demand.

Trading had been briefly suspended for the third straight day Thursday, after the bluechip index plunged. The government this month also dropped its peg to the U.S. dollar and let the rupee float.

“To put a stop to the selling and get some support, there needs to be good visibility on how the energy situation is evolving,” said Kavinda Perera, head of research at Asia Securities in Colombo. “If you see continuous devaluation and lack of dollar liquidity in the market, it affects business and sentiment.”

President Gotabaya Rajapaksa is seeking a loan from the International Monetary Fund and is simultaneously talking to countries including China, India and Bangladesh for bilateral aid, to ease the crisis.

Sri Lanka energy minister Pavithra Vanniyarachchi told reporters in Colombo Thursday that the government was expecting a shipment of diesel under a $500 million credit line from India to import fuel.

The cargo was expected late on April 1, and would help reduce the duration of daily power outages, she said, without elaborating.

Ceylon Petroleum Corp. requested the public not to queue up for diesel at state-run filling stations on Wednesday and Thursday after the refiner failed to unload a shipment of 37,500 metric tonnes of the fuel.