News & market updates

CoPF chair Harsha de Silva questioned CPC's FX management after a reported $46m single-day dollar purchase on 29 May, warning large one-off buys can destabilise the FX market. CPC says it will smooth purchases, planning $11m daily and preparing multi-day buying plans after fuel import bills jumped from ~$100m to >$500m monthly.

The US and Iran signed a memorandum committing to a 60-day ceasefire and reopening the Strait of Hormuz, with waivers expected to allow Iran to resume oil exports. The accord also envisages a $300 billion reconstruction fund and sets tougher talks for a final deal within 60 days.

Deputy Finance Minister Anil Jayantha Fernando said the rupee’s 7% year-to-date fall, which hit a four-year low of 354 LKR on May 21, is mainly driven by speculation and false information. The Central Bank used $211.3m of reserves in May, hiked the OPR 100bp to 8.75% and shortened the exporters' dollar-conversion window to 30 days.

The U.S. and Iran signed an interim peace deal extending the ceasefire by 60 days, leaving Asian stocks largely steady while oil prices dipped (U.S. crude $75.83, Brent $78.41); investors also digested Fed officials' hawkish comments that lifted yields and shifted market sentiment.

A Peking University delegation led by Prof. Wang Weijia held high-level meetings in Colombo to explore deeper Sri Lanka–China cooperation, prioritizing trade and FDI in logistics, energy, tourism and Port City Colombo and potential areas like high‑tech manufacturing and pharmaceuticals.

Deloitte Sri Lanka held a client session 'From Compliance to Capital' emphasising climate disclosure (SLFRS S1/S2), decarbonisation pathways and sustainable finance as tools to strengthen business resilience and improve access to capital across telecoms, financial services, manufacturing and agriculture.

Sri Lanka will stick to a 5% growth target despite the Central Bank's 100bp policy rate hike to 8.75% and falling consumption; Q1 GDP expanded 5.1%. The rate rise, 27% private credit growth and steep fuel price increases are cited as headwinds, while the IMF has cut its growth forecast to 3%.

UK Trade Envoy Lord Hannett will visit Colombo 17–19 June 2026 to hold talks with government ministers and business leaders to deepen UK–Sri Lanka trade and investment ties and promote use of the UK's Developing Countries Trading Scheme zero-tariff access for Sri Lankan exports. He will engage with exporters including the apparel sector, UK firms operating locally, and stakeholders in clean energy, retail, manufacturing and technology.

Brent crude fell below $80, down more than one-third from recent peaks after reports the U.S. will waive sanctions on Iranian oil, easing inflation fears and pushing global bond yields lower ahead of Kevin Warsh's debut as U.S. Fed chair. Markets awaited Warsh's guidance on future rate moves.

Oil prices dipped as investors weighed a US‑Iran deal and uncertainty over the Strait of Hormuz: Brent fell to $78.80/bbl (-0.2%) and WTI to $75.80/bbl (-0.3%), both down about 5% over two sessions to three‑month lows. Markets expect a removed geopolitical premium if shipping fully resumes, but tanker traffic has yet to recover.

Sri Lanka's rupee was quoted at 333.50/335.00 to the US dollar and bond yields fell sharply ahead of a 70 billion rupee treasury bill auction. Yields on several government bonds eased (e.g., 01.08.2030 at 11.22/25% from ~11.40/50%), while Brent crude prices declined.

Secondary bond market rallied on peace-deal optimism and a reported budget surplus of Rs. 105 billion for Jan–Apr 2026, driving sharp declines in yields across the curve (2030 tenors around 11.30%–11.40%). The rupee strengthened to Rs. 333.00/334.50 and Brent crude fell, easing inflation and external pressures.

The Bank of Japan raised its policy rate to 1%, the highest since 1995, as Asian stocks made modest gains while initial optimism over a preliminary U.S.-Iran deal cooled. Brent crude fell to $82.96 a barrel and gold rose, with mixed currency and equity moves across the region.

Brent crude fell about 4.5% to below $83.4 per barrel after the US and Iran confirmed a deal to end the war, triggering global equity gains. Asia-Pacific indices and US futures rose as analysts said lower oil should ease inflation pressure ahead of the US Federal Reserve rate decision.

Sri Lanka has spent 17.4% of its 2026 capital budget, about Rs.240 billion of Rs.1,380 billion, the National Budget Department director told Parliament; officials said some capital expenses will remain unspent and that Rs.20 billion cited was a reallocation after a fuel price hike.

World Bank cut its global growth forecast to 2.5% for 2026, warned higher energy and fertiliser prices will raise inflation, and is making $50–60bn available immediately (scalable to $80–100bn over 15 months) to support vulnerable countries.

Oil prices fell after the U.S. and Iran reached an initial deal to end the war and reopen the Strait of Hormuz; Brent fell $4.08 (4.7%) to $83.25/bbl and WTI fell $4.35 (5.1%) to $80.53.

Asian share markets surged and Brent crude fell about 4% to $83.80 after a tentative US–Iran deal eased supply concerns, reducing inflationary pressure and lessening the need for tighter policy as central banks meet this week; U.S. yields fell and the dollar weakened.

Huawei unveiled a grid-interactive AIDC strategy at the 2026 Global AIDC Industry Summit in Dongguan, promoting '3+1' innovations to build grid-friendly, energy-efficient, high-density AI data centers that maximize tokens per watt and emphasize renewable integration and liquid cooling.

The Sri Lanka Business Council UAE held a 35th-anniversary investment forum in Dubai on 11 June that drew 225 UAE business leaders and investors. Colombo Port City presented investment opportunities and speakers encouraged investment in tourism, hospitality, IT, logistics, manufacturing and renewable energy in Sri Lanka.

Energy Minister Anura Karunathilaka said El Niño could reduce hydropower generation by about 127 GWh but is unlikely to cause major disruptions, with alternative generation sources available to ensure an uninterrupted power supply.

ADB announced a $4 billion financing package to help 15 countries, with Sri Lanka first to receive $100m, to mitigate economic fallout from the Middle East conflict. The package includes about $3bn in government-requested support and $1bn for trade finance, raising Sri Lanka's planned 2026 ADB budget support to $480m.

Brent crude slipped below $90 after President Trump said planned strikes on Iran were cancelled and talks were progressing, easing supply-risk fears; Brent traded about $88–$89/bbl while WTI was around $86/bbl.

ADB is providing $4 billion in rapid financing — about $3 billion requested by governments and $1 billion in trade finance — to help countries, including Sri Lanka, withstand fallout from the Middle East conflict. Support includes policy-based loans, trade finance for energy and food imports, and rapid repurposing of existing funds.

ADB is deploying $4 billion to help countries including Sri Lanka manage impacts from the West Asia conflict, with about $3 billion requested by governments and $1 billion for trade finance for energy and food imports. Support includes policy-based loans, countercyclical financing, rapid repurposing of portfolios and emergency assistance.

Oil prices fell after U.S. President Trump called off planned strikes on Iran, with Brent down $1.83 (2%) to $88.55/bbl and WTI down $1.60 (1.8%) to $86.11. OPEC also lowered its 2026 world oil demand growth forecast to 970,000 bpd from 1.17 million bpd.

World Bank says Middle East conflict will slow global growth to 2.5% in 2026 (the lowest since COVID-19) and is ready to provide up to $100 billion to affected countries over 15 months. It warns higher energy prices (Brent ~ $94/bbl in 2026), rising inflation and borrowing costs, and downside risks that could cut growth to 1.3% if disruptions worsen.

Fitch revised its 2026 global sovereign sector outlook to 'deteriorating' from 'neutral', citing spillovers from the US‑Iran war that will weaken GDP, raise inflation and push up bond yields. Fitch said Greater China is the only region upgraded to 'neutral' due to strong exports and lower energy exposure.

SAARC CCI President Chandi Raj Dhakal met Yunnan Governor Wang Yubo in Kunming to push for expanded trade, investment and connectivity between South Asia and Yunnan, highlighting opportunities in infrastructure, tourism, logistics, digital industries, renewable energy, agriculture and manufacturing.

Disaster Management Centre warns Sri Lanka may need to purify and distribute seawater if a strong El Niño triggers prolonged drought, risking reservoirs, agriculture and hydropower output. Authorities are reviewing reservoir management, cultivation schedules and electricity generation contingency plans.