News & market updates

Commercial Bank of Ceylon signed an MoU with the Sri Lanka Air Force to offer SLAF personnel concessionary personal loans, leasing, housing loans and credit cards. The package includes concessionary interest rates, reduced documentation charges and flexible repayment alignment to incomes.

Sri Lanka's rupee closed at 337.00/75 per US dollar, slightly weaker than 337.00/30 the previous day, while local bond yields rose (notably the 2030 and 2035 maturities). An auction of 140 million rupees in treasury bills is scheduled for Wednesday.

The IMF approved Sri Lanka’s combined Fifth and Sixth Reviews on 28 May 2026, releasing SDR 508 million (~US$695m) and bringing total EFF disbursements to SDR 1.778 billion (~US$2.4bn). The Fund said stabilisation has improved revenues, growth and reserves but warned debt sustainability remains “very high” and key structural reforms (electricity, public financial management) are unfinished.

Rupee weakened to 338.00/10 per USD from 337.00/30 while bond yields were broadly steady and a 140,000 million rupee T-bill auction is scheduled for Wednesday. A 01.08.2030 bond was quoted at 12.10/20% (down from 12.15/20%) and a 15.06.2034 bond at 13.00/15% (up from 12.75/13.00%).

Fitch cut its forecast for global growth in 2026 by 0.2 percentage points to 2.4% as an oil shock from the US‑Iran conflict and a prolonged Strait of Hormuz closure lifts energy prices (Brent now seen at $87/bbl for 2026). The agency said a tech investment boom cushions activity and central banks are likely to hold rates this year amid higher inflation risks.

Wealth Trust/Finance Ministry reported a steady secondary bond market and announced a Rs.150 billion Treasury Bond auction for 11 June (settlement 15 Jun 2026): Rs70b 15-May-2030 (coupon 11.00%), Rs60b 15-Dec-2032 (11.50%), Rs20b 1-Jul-2037 (10.75%). Secondary yields were broadly steady (e.g. 15.09.27 at 11.00%) and USD/LKR spot closed at Rs.337.00/337.35.

ASPI fell 1.57% (340.85 pts) to 21,403.28 as the CSE opened in the red amid rising interest rates and Middle East tensions. Turnover was over Rs.2.6bn with foreign net outflows of Rs.54.1m; Melstacorp, Bukit Darah, Sampath and LOLC were key negatives while John Keells and ACL led turnover and HNB rose.

Active credit cards rose by 12,999 in April to 2,228,852, slowing from a 22,473 increase in March; year-to-date growth was 63,070 (2.9%) and 2025 saw a 7.8% rise. Expansion has been supported by economic recovery, lower interest rates and promotional campaigns by card issuers.

Asian markets plunged on Monday as a tech-led sell-off and a rise in oil prices sparked volatility — South Korea's Kospi briefly halted trading after an almost 9% intraday fall and closed 8.3% lower. US indexes partly recovered amid investor concern that higher US interest rates and energy-driven inflation could persist.

Sri Lanka Customs says vehicle imports remained resilient despite a 50% surcharge introduced in May, with vehicle duties contributing about 30% of Customs revenue (e.g. Rs.76bn of Rs.212bn as of 28 May). The CBSL was a net seller of $211.3m in May as the rupee weakened, underlining FX pressure and potential interest-rate implications.

Sri Lanka's rupee closed at 337.00/30 to the US dollar on Monday, from 335.50/336.25 the previous day. Bond yields were mostly steady: the 01.08.2030 bond rose to 12.15/20%, the 15.01.2033 was unchanged at 12.30/65%, and the 15.03.2035 edged up to 12.80/13.10%.

New active credit cards in Sri Lanka rose by 12,999 in April, down from 22,473 in March, taking total active cards to 2,228,852 by end-April. Analysts say growth was driven by economic recovery and falling rates but may slow after the Central Bank's 100bp May rate hike and amid fuel rationing.

Private sector borrowing rose by Rs. 100.6 billion month‑on‑month to Rs. 10.8 trillion in April (0.9% M-o-M, 27% YoY), according to CBSL data. Domestic banking units accounted for most of the increase (up Rs. 97 billion to Rs. 10.24 trillion) while OBU credit rose marginally to Rs. 559.6 billion.

Colombo Stock Exchange slid, ASPI down 1.68% (366.31 points) to 21,377.82 at midday. Vallibel One released its annual report showing profit of 13,164,778 rupees (prev. 11,760,829) and its shares were trading down 0.41% at Rs.96.00.

Secondary bond market ended the week bearish as yields rose across the curve (trades ranged about 11.95%–13.30%) and foreign holdings fell by Rs.4.77bn to Rs.121.33bn. Pressure came from a 100bp policy rate hike, rising T‑bill yields, tighter liquidity and FX weakness (USD/LKR ~335.75/336.25).

The Central Bank of Sri Lanka said the financial system remained resilient in Q1 2026 despite rising risks, with banking credit up 24.4% YoY and Stage 3 loans down to 9.4%. It imposed a 70% LTV cap on gold loans and cut vehicle LTVs by 10pp from 25 May, noted $103.4m foreign outflows and a 100bp policy-rate hike driving higher yields.

Fitch cut its 2026 global growth forecast by 0.2pp to 2.4% and raised its 2026 Brent crude assumption to USD87/bbl (from USD70/bbl) due to an oil shock from the US–Iran war. Strong IT-related investment is partly cushioning the hit, while central banks’ policy paths have shifted with rates expected to hold this year and cuts delayed until 2027 in some cases.

Sri Lanka rupee quoted at 336.25/35 to the US dollar on Monday (was 335.50/336.25), while bond yields were largely steady—01.08.2030 at 12.10/40% and 15.03.2035 at 12.95/13.05%—and the All Share Price Index fell 0.38%.

Sri Lanka's worker remittances rose 32% to US$847 million in May 2026. Remittances were US$3,909.7m in the first five months (up 26% y/y), driven by Middle East tensions, rupee depreciation and a shift from informal to formal banking channels after central bank policy changes.

Foreign investors sold about US$14.7mn of Sri Lanka government securities in the week to June 4 despite a 100bp hike in the Central Bank's Overnight Policy Rate. The rupee has fallen ~7.8% YTD through June 5 and four-week net outflows total around US$65mn amid higher fuel imports and Middle East risks.

Sri Lanka's rupee closed at 335.50/336.25 to the US dollar on Friday, firming from 336.90/337.50 the previous day, while government bond yields fell (e.g. the 01.08.2030 bond closed at 12.05/20%, down from 12.25/40%).

Banks will raise annual credit card interest rates from 26% to 28% effective July 1 after the Central Bank raised the policy rate by 100bps. Active cards increased to 2,215,853 by Q1 2026 and outstanding credit card balances rose to Rs. 194,105 million by March 31, 2026.

Sri Lanka’s rupee weakened to 336.00/338.00 vs the US dollar in the spot market (from 336.90/337.50), while bond yields were largely steady; government bonds quoted e.g. 01.07.2028 at 11.85/12.00, 01.08.2030 at 12.25/12.35 and 15.03.2035 at 13.20/13.30. ASPI opened up 0.20% at 21,804.

Secondary bond market remained subdued with yields edging higher after the Treasury Bill auction; short- to mid-dated maturities traded around 11.95%-12.00% while longer-dated lines traded up to about 13.30%. Money-market rates were elevated (call 9.16%, REPO 9.20%), net liquidity surplus Rs.111.94bn, and USD/LKR closed at 336.75/337.50.

Colombo market fell sharply, ASPI down 1.14% (250.79 pts) to 21,760.31 and the S&P SL20 down 1.08% to 6,031.73. Foreign investors were net sellers of Rs.92.25m and higher interest rates weighed on investor sentiment.

Sri Lanka's rupee closed at 336.90/337.50 to the US dollar, weaker than 334.50/335.50 the previous day, while bond yields rose (01.08.2030 closed 12.25/40% vs 12.15/25%; 15.03.2035 13.20/30% vs 13.15/25%; 15.01.2033 flat at 12.30/75%).

Sri Lanka sold 1,050 million rupees of Treasury bills on tap at an average rate of 10.02%, bringing this week's total bills sold to 112,214 million rupees; settlement is June 5.

Colombo stocks fell as investors shifted to fixed income after a central bank rate hike; ASPI down 1.14% to 21,760 and S&P SL20 down 1.08% to 6,031. Top negative contributors included Dialog, Commercial Bank, Melstacorp and HNB, while United Motors announced a 40-cent dividend.

Sri Lanka’s rupee was flat at 334.50/335.50 to the US dollar in the spot market and bond yields were broadly steady. Telegraphic transfer rates were 330.50/339.50 (buy/sell); the All Share Price Index opened up 0.07% at 22,027 while the S&P SL20 opened flat at 6,097.

Sri Lanka completed the IMF EFF fifth and sixth reviews and received close to $700 million; Finance Deputy Minister Dr. Anil Jayantha Fernando met IMF Resident Representative Martha Woldemichael to discuss recent economic developments and next steps.