News & market updates

ADB will provide $100 million in additional budget support to Sri Lanka, raising its planned 2026 budget support to $480 million. ADB is also fast-tracking a $200 million emergency assistance loan to restore transport networks and irrigation, and plans to scale up its program to over $1 billion to support infrastructure and reforms.

Colombo Stock Exchange jumped as ASPI closed up 3.79% at 21,868.85 and the S&P SL20 rose 3.81% to 6,134.23. Top positives included Commercial Bank, HNB, Melstacorp, John Keells and Hayleys; turnover was Rs.6.41bn with highest activity in food, beverages & tobacco.

Middle East war and near-closure of the Strait of Hormuz have caused port congestion that left hundreds of used cars (including luxury models) stranded or delayed into Sri Lanka, forcing diversions, offloads at alternative ports and higher freight and storage costs for exporters.

Monetary Policy Board kept the Overnight Policy Rate unchanged at 7.75%. Inflation was 1.6% y-o-y in Feb 2026 and is expected to reach 5% in Q2-2026; the board cited higher global energy prices, Middle East conflict risks, and FX reserves of USD 7.3bn as key considerations.

ADB announced a financial support package including fast-disbursing budget support and reactivated trade and supply-chain finance (including for oil imports) to help developing member countries manage economic fallout from the Middle East conflict. The bank will use countercyclical resources and monitor energy, inflation and financial conditions.

President Dissanayake directed the Agriculture Ministry and fertiliser importers to secure urea supplies for the 2026 Yala season; 125,000 mt is needed, stocks fell from 102,000 mt on 1 March to ~68,000 mt by 17 March, and 77,000 mt more have been ordered (21,000 mt due end‑March/early April). He also urged expedited payments to suppliers and discussed storage and credit facilities to maintain buffer stocks.

President Trump spoke with Indian PM Modi about the escalating Middle East situation, with both leaders stressing de‑escalation and the importance of keeping the Strait of Hormuz open for shipping. They agreed to stay in touch to pursue stability and restoration of peace.

The ASPI rose 3.47% (706.26 pts) to 21,071.23, recovering Rs. 244 billion on reports of a possible de‑escalation in the Middle East; the S&P SL20 gained 3.91% to 5,909.23. Market turnover exceeded Rs. 4.2 billion with gains led by Commercial Bank, Sampath Bank, John Keells and Colombo Dockyard while foreigners were net sellers.

Sri Lanka thanked Iran for an offer to supply oil but said it cannot accept because it has no ship to import; the government has floated tenders and expects fuel shipments to cover needs until end-April. The country has implemented fuel rationing, is exploring a G2G deal with Russia, and oil prices have risen about 35%, lifting transport and food costs.

ADB announced a financial support package to help its developing member countries mitigate economic and financial impacts from the Middle East conflict, including fast-disbursing budget support and reactivated trade and supply-chain finance for oil imports. The bank will mobilize countercyclical lending and TSCFP support to address energy price volatility, supply disruptions, inflationary pressures and risks to tourism and trade.

Sri Lanka and Brazil agreed to elevate bilateral trade to USD 1 billion by 2030. They also committed to finalise pending MoUs (including on traditional/Ayurvedic medicine), and to sign Dairy Livestock and Sugarcane technical cooperation projects while exploring cooperation in agriculture, ports and tourism.

Fitch warns APAC sovereign credit profiles face heightened downside from a prolonged Iran conflict as higher oil prices and supply disruptions raise inflation, weaken growth and worsen public finances; an adverse scenario assumes Brent at about $128/bbl in 2Q26 and $100/bbl for 2026. Net fossil-fuel importers (e.g. India, Korea, Pakistan, the Philippines, Maldives, Thailand) would be hardest hit, while supply-chain and fertiliser disruptions could amplify inflation and food-security risks.

National Transport Commission raised bus fares by 12.19% effective 12:01 a.m., lifting the minimum fare from Rs.27 to Rs.30 and the maximum from Rs.2,159 to Rs.2,422 after diesel rose to Rs.382/L. Western Province three-wheeler fares now start at Rs.110 for the first km and Rs.90 per additional km.

Indian sugar mills locked in about 100,000 metric tons of export shipments in a week as a record-low rupee and rising global prices restored the economics of overseas sales. Mills have contracted roughly 550,000 tons this season and India raised its export quota to 2 million tons.

ADB President Masato Kanda began a three-day visit to Sri Lanka to deepen economic cooperation, review development financing and macroeconomic stabilisation, and assess Cyclone Ditwah damage. He toured Colombo Port, will meet the president and private sector, and will review project pipelines and recovery needs.

Essential food importers warn retail prices could rise 10–20% ahead of the Sinhala and Tamil New Year as higher bunker fuel, freight and war-risk insurance costs plus a weakening rupee lift landed costs, while assuring there are currently no shortages.

ASPI fell 1.33% to 20,364.97 as the market reacted to Middle East tensions and rising crude oil prices. Market turnover was Rs.2.37bn, the market has lost over Rs.1.1tn since 28 Feb, primary negative contributors were DOCK, JKH, RIL, DIAL and CFIN, while JKH, SINS and DIAL saw largest foreign outflows and PKME, WIND and TAP largest inflows.

ADB President Masato Kanda led a delegation to the Sri Lanka Ports Authority and Port of Colombo on 23rd to review ongoing development projects and port operations. Discussions focused on project progress, improving delivery timelines, operational efficiency and strengthening ADB collaboration.

Iran says it will supply fuel and other essentials to Sri Lanka if requested, as Sri Lanka faces severe fuel shortages, a 25% recent price hike, aggressive rationing and reserves estimated to last six weeks. The government has imposed a four-day public-sector week and bears roughly LKR 20 billion monthly in fuel subsidies.

Colombo Stock Exchange closed lower as the ASPI fell 1.35% to 20,360.27 and the S&P SL20 slid 1.06% to 5,691.97. WindForce rose after winning a 10 MW/40 MWh BESS contract worth Rs1.73bn and was the top positive contributor, while Colombo Dockyard and John Keells were top negatives; turnover was Rs2.37bn.

Sri Lanka recorded 5% GDP growth in 2025, with GDP surpassing $106.8bn; the services sector contributed 54.6% and industries 25.4%, while tourism and construction were cited as significant contributors to the recovery.

ADB President Masato Kanda arrived in Sri Lanka for a three-day visit to strengthen economic cooperation and assess Cyclone Ditwah damage, including touring Colombo Port and inspecting affected areas in Kegalle. He will meet the President and private-sector representatives to discuss recovery and development financing.

Economist Talal Rafi warned the Middle East war could complicate Sri Lanka's debt path as IMF program plans boost external reserves from ~$8.9bn to $13.4bn by end-2027 and envisage a $1.5bn ISB in 2027, with annual external debt servicing rising from $2bn to $3bn; he noted reform-dependent opportunities in renewables and data centres.

Uber and PickMe jointly urged the government to grant higher fuel quotas for their most-engaged drivers and delivery partners, saying the recent quota increase from 21 March remains insufficient to sustain operations. They said enhanced weekly allocations would help maintain essential services, livelihoods and tourism support.

Asia shares fell while US 10-year Treasury yields hit an eight-month high of 4.415% as the Gulf war escalated and Brent oil traded around $112.62 a barrel, lifting inflation and pushing markets to price out rate cuts.

Uber and PickMe jointly urged the Government to allocate higher weekly fuel quotas for their most engaged drivers and couriers, saying the recent regular quota increase from 21 March remains insufficient to sustain operations. They said enhanced allocations would support mobility, deliveries and tourism while platforms will monitor trip volumes to use fuel efficiently.

Port City Colombo is proposed as a strategic South Asian hub aimed at driving construction and infrastructure development and boosting trade, tourism and IT-enabled services in the region.

MullenLowe Sri Lanka has integrated Synapse VII’s advanced analytics into its LoweDigital offering to provide evidence-led digital effectiveness for clients. The partnership aims to shift measurement beyond short-term engagement toward media patterns that drive long-term brand performance.

IIHS introduced the International Foundation Programme as an alternative to Sri Lanka's A/L pathway, offering university-style learning, IELTS preparation and career-focused mentoring. The programme emphasizes independent study, project-based assessment and early industry mentoring to prepare students for local and international higher education and careers.

Speakers at an OPA seminar warned the Middle East conflict will raise global energy prices, strain fuel supplies (fuel ≈20% of Sri Lanka's import bill), and hit tourism and remittances (≈40% from the Middle East), urging price reforms, renewables, maritime and cyber security upgrades.