News & market updates

Bangladesh has requested a new IMF-supported financial arrangement to back its economic reform program. IMF staff will engage with authorities, plan a visit to assess developments and discuss a potential program’s size and reform commitments tied to balance-of-payments needs.

Treasury bill yields rose for a third consecutive week — 91-day at 9.84%, 182-day at 10.01% and 364-day at 10.02% — and the auction was undersubscribed, raising Rs.111.16bn of Rs.140bn offered (79.40% subscription). Secondary bond market remained bearish, net liquidity surplus was Rs.101.71bn and USD/LKR closed at 335.00/337.00.

ASPI fell 0.75% (166.55 pts) to 22,011.10, extending losses to a third session with turnover over Rs.2bn and foreigners net sellers of Rs.410.26mn. Negative contributors included Dialog, Sampath, Ceylon Beverage, Ceylon Cold Stores and Colombo Dockyard; Teejay Lanka, John Keells and Commercial Bank led turnover.

Commercial Bank of Ceylon signed a Memorandum of Understanding with the Sri Lanka Air Force to offer SLAF personnel concessionary financial facilities — personal loans, leasing, housing loans and credit cards — at preferential interest rates and flexible repayment terms.

Sri Lanka's Treasury bill yields rose across maturities at Wednesday's auction, with 111.1 billion rupees sold of 140 billion offered. The 3-month yield rose 48bps to 9.84%, the 6-month 33bps to 10.01% and the 12-month 19bps to 10.02%.

Sri Lanka's rupee closed at 334.50/335.50 to the US dollar on Wednesday, weaker than Tuesday's 332.00/333.50, while bond yields rose; the 01.08.2030 bond closed around 12.15–12.25% (up from ~12.05–12.15%) and the 15.03.2035 bond near 13.15–13.25%.

Bangladesh has requested a new IMF-supported financial arrangement to support its reform program; IMF staff will engage with authorities, plan a visit to assess developments, and negotiate the size and reform commitments of any successor program.

Sri Lanka's rupee weakened to 333.00/335.50 per US$ in the spot market from 332.00/333.50 the previous day; bond yields were broadly steady and a 140,000 million rupee Treasury bill auction was ongoing.

Secondary bond market remained bearish with yields rising across the curve and a Rs. 140 billion Treasury Bill auction scheduled today. Call money stayed above 9% for a fourth day (9.14%) and USD/LKR closed at 332.50/333.50.

Sri Lanka's rupee closed at 332.00/333.50 to the US dollar on Tuesday (from 331.50/332.00), while bond yields were broadly steady; the telegraphic transfer rate was 327.00/336.00. 140,000 million rupees of Treasury bills are to be issued via auction on June 3.

Colombo Stock Exchange fell with the ASPI down 0.39% after the Central Bank raised the Overnight Policy Rate by 100 basis points to 8.75%. Kerner Haus Global Solutions (CPRT.N0000) filed a rights issue to raise 420.12 million rupees (10,502,975 shares at Rs.40).

Sri Lanka's rupee was quoted at 331.50/332.50 to the US dollar and bond yields rose, with the 01.11.2033 paper quoted at 12.85/13.00 percent (up from 12.00/80 percent). The All Share Price Index was up 0.04% at 22,272 while the S&P SL20 fell 0.08% to 6,145.

Secondary bond market opened on a bearish note as yields rose across the curve after a 100bp policy rate hike and global yield/oil pressure; key maturities traded around 11.95%–13.11% (01.08.30 11.95–12.10%, 15.01.33 12.30–12.45%, 01.06.33 12.75%, 15.03.35 12.95–13.11%).

Colombo bourse closed lower with the ASPI down 0.21% to 22,695 as investor sentiment remained subdued after the CBSL rate hike; market turnover was over Rs. 1.7 billion.

Sri Lanka's rupee closed at 331.50/332.00 to the US dollar in the 1-week spot on Monday and domestic government bond yields rose. The telegraphic transfer rate was 326.00/335.00 (buy/sell); the 01.08.2030 bond moved to 12.05/15% from 11.80/90%.

Sri Lanka sold an extra Rs24,000 million of Treasury bonds on tap at the auction-set rates, taking the week's total sales to Rs264 billion; weighted average yields were 11.86% (2030), 12.32% (2033) and 12.93% (2035), settlement June 1.

Sri Lanka's rupee was quoted at 330.00/332.00 to the US dollar in the spot market on Monday (from 331.00/332.00 on Friday); telegraphic transfer rates were 326.00/335.00. Government bond yields were largely flat (2030 at 11.80–11.90%), and the ASPI was up 0.30%.

Colombo headline inflation rose to 5.5% YoY in May (from 5.4% in April), led by non-food price increases in housing, electricity, gas and transport while food inflation slowed to 0.9%. The CBSL said Middle East tensions and energy price escalations keep inflation outlook uncertain and likely above 5% near term.

Secondary bond market ended the week bullish, with yields falling about 20–35bps on Friday after US‑Iran ceasefire optimism and Sri Lanka securing IMF 'Super Tranche' approval, despite a 100bp policy-rate hike earlier in the week. Foreign holdings fell Rs.7.33bn to Rs.126.10bn; money-market surplus dropped to Rs.92.15bn and call/repo rates rose to 9.10%/9.13%.

First Capital Holdings PLC reported Profit after Tax of Rs. 2.10 billion for FY2025/26 (year ended 31 Mar 2026), down from Rs. 5.02 billion a year earlier, with Net Income before Operating Expenses of Rs. 6.59 billion; primary dealer, corporate finance and stock broking units drove the performance.

IMF Mission Chief Evan Papageorgiou said Sri Lanka’s Treasury does not buy dollars for debt service and that the central bank acts as the intermediary, buying FX and effectively monetizing the balance of payments — expanding reserve money and raising risks to inflation, reserves and the rupee.

Foreign investors sold a net US$22.55 million (Rs 7,328 million) of Sri Lanka government securities in the week ended May 27, central bank data showed. The outflow is the third consecutive weekly net outflow (over US$51m) amid rupee weakness and a recent 100bp policy rate hike after a 35% fuel price rise.

First Capital Holdings PLC reported a Profit after Tax of Rs. 2.10Bn for the year ended 31 March 2026, with Group net income before operating expenses of Rs. 6.59Bn. The Primary Dealer (PAT Rs.1.60Bn) and Corporate Finance (PAT Rs.0.93Bn) divisions were key contributors.

Sri Lanka's rupee closed at 331.00/332.00 to the US dollar on Friday, weaker than 328.50/332.00 on Wednesday. Local government bond yields fell: the 01.08.2030 bond closed at 11.80/90% (from 12.00/15%), 15.01.2033 at 12.20/40% (from 12.45/55%) and 15.03.2035 at 12.85/95% (from 13.00/15%).

Sri Lanka's CCPI rose to 5.5% in May 2026, a 27-month high driven by a c.40% fuel price increase that pushed up both food and non-food items. The central bank this week raised the policy rate by 100 basis points to curb demand-driven inflation.

Colombo headline inflation rose to 5.5% year‑on‑year in May 2026 from 5.4% in April, driven by higher non-food prices—notably housing, L.P. gas and petrol—while food inflation eased to 0.9%. Core inflation edged up to 3.9% and inflation is expected to remain above the 5% target near term.

IMF Mission Chief Evan Papageorgiou said Sri Lanka’s monetary policy remains broadly appropriate despite a 100-basis-point CBSL rate hike and the IMF approving combined Fifth and Sixth EFF reviews that unlock about $700m. He expects inflation to stay near the 5% target and defended a flexible rupee as a shock absorber against external (including oil) shocks.

The Treasury Bond auction was fully subscribed, raising the full Rs.240 billion at the first phase with WAYRs of 11.86% (01.08.30), 12.32% (15.01.33) and 12.93% (15.03.35). Secondary market saw renewed buying; net liquidity surplus was Rs.126.70bn and USD/LKR closed near 328.50/332.

Sri Lanka's rupee traded at 328.00/330.00 to the US dollar on Friday and bond yields fell sharply (e.g., the 01.08.2030 bond quoted at 11.80/85% down from ~12.00/15%) after news of a US‑Iran truce and oil falling to $91/bbl; ASPI rose 100.53 pts to 22,299.76.

JB Financial launched the JB Vantage Credit Opportunity Fund, offering an annualised yield of about 10.26% with daily subscriptions and redemptions and no early-withdrawal penalties. The SEC-approved fund invests in government and corporate debt with a LKR 100,000 minimum.