News & market updates

Government expects to receive a $700m IMF EFF tranche on 27 May. It reiterated commitment to fiscal reforms, aims to meet its 2032 debt-to-GDP target by end-2026, and said multilateral inflows, exports and remittances will strengthen the foreign exchange position.

The Central Bank met bankers and currency dealers as the rupee weakened—TT LKR/USD at Rs.342.63/354.03 and interbank trading around Rs.331–348—and authorities are considering tighter FX rules and a possible 50–100bp policy rate hike to curb volatility.

Government imposed a temporary 50% surcharge on customs import duty for imported vehicles from 16 May for three months and ruled out a vehicle import ban. Deputy Finance Minister said 380 LCs covering 1,782 vehicles valued $23.71m were opened on 15 May and LC values fell to $19.9m on 18 May and $14.98m on 19 May.

CT Smith says Sri Lanka's current pressures are driven mainly by an external energy shock, with near-term multilateral inflows of about $1.38–1.4bn (IMF $700m, ADB $480m, World Bank $200m) expected to help stabilize the rupee. The firm notes the rupee has weakened ~6.2% YTD to Rs329.64, inflation rose to 5.4% in April, and the CBSL policy decision is due 26 May (base case: rates held at 7.75%).

UNP says the Sri Lankan rupee has depreciated from Rs.292 to Rs.354 in the 20 months since the current government took office, blaming a failure to continue the previous economic programme and external pressures including the Middle East war, higher shipping costs and a stronger US dollar. The party warned exporters may gain while workers and the public face higher living costs, noting the apparel sector views depreciation positively.

Opposition Leader Sajith Premadasa urged the Government to begin negotiating a successor IMF program, saying Sri Lanka has $7bn in reserves against the IMF's $14.2bn target by March 2027 and would need about $600m/month to bridge the gap. He noted ongoing talks with the IMF to adjust the current EFF amid Middle East war-driven oil-price shocks and rupee weakness.

Energy Minister Anura Karunathilaka said the government will not seek a further electricity tariff increase from the PUCSL before September and has provided a Rs.15 billion subsidy to cushion other consumers. The latest revision mainly affects users consuming over 180 units/month amid USD appreciation and Middle East pressures on energy costs.

US dollar selling rates at commercial banks eased below Rs.340 today (22) after peaking at Rs.354 on 21st. Quoted afternoon selling rates included Commercial Bank Rs.342.50, HNB Rs.340.00, Sampath Rs.340.50 and Nations Trust Rs.336.49.

IMF mission chief Evan Papageorgiou urged Sri Lanka to continue allowing the economy to adjust as the rupee has depreciated sharply ahead of IMF Board approval of the fifth and sixth EFF reviews next week (May 27). He noted authorities have made progress restoring macro stability, rebuilding reserves and strengthening confidence.

Opposition Leader Sajith Premadasa urged the government to begin negotiating a successor IMF programme, warning Sri Lanka is likely to miss the March 2027 reserves target (current reserves US$7bn vs target US$14.2bn) as the rupee has weakened ~14% in 12 months. Analysts say higher import-driven inflation and recent depreciation put pressure on the Central Bank to raise interest rates.

Sri Lanka's rupee traded at 342.00/350.00 to the US dollar on Thursday (telegraphic transfer 345.00/354.00) while government bond yields rose; the 15.12.2029 bond closed at 10.50/65% (up from 10.30/45%) and other mid- to long-dated yields moved higher.

Sri Lankan rupee weakened further, with commercial bank TT rates at Rs. 332.09/342.70 and spot trading around Rs. 329.25–330.25, extending depreciation amid strong dollar demand, higher fuel import costs and Middle East tensions.

The Joint Apparel Association Forum (JAAF) said the Sri Lankan rupee's 4.8% depreciation against the US dollar reflects wider global pressures (Middle East conflict, higher fuel and shipping costs) rather than domestic weakness, and that a weaker rupee can boost apparel export competitiveness.

CBSL Governor Nandalal Weerasinghe defended Sri Lanka’s flexible exchange rate at a Committee on Public Finance hearing, saying rupee depreciation does not change external debt in dollar terms and that exchange-rate flexibility aids reserve rebuilding and competitiveness. He urged strengthening dollar earnings via exports and remittances and stressed the CBSL's mandate on price and financial stability.

Sri Lankan rupee depreciated further, with the US dollar selling rate rising to Rs. 354.03 (buying Rs. 342.63), surpassing Rs. 350 for the first time since March 2023. The currency has come under pressure amid global and domestic factors, including uncertainty linked to the ongoing Middle East conflict.

Sri Lanka's rupee traded at 343.50/352.50 (TT buying/selling) on May 21, 2026, while government bond yields rose; e.g., the 15.12.2029 was quoted 10.30/40% (from 10.30/45%), 01.08.2030 10.45/55% (from 10.35/50%) and 15.06.2034 11.55/65% (from 11.40/50%).

Sri Lanka's rupee has fallen 4.6% this month and slid to 334.52 per dollar, which officials attribute to speculation, a six-fold surge in the fuel import bill, and outflows from government securities and the stock market.

Colombo Stock Exchange rose as the ASPI gained 0.21% to 21,833, with banks leading turnover at Rs.599.8 million and the rupee weakening to Rs.352.50. Amana Bank announced a registered address change effective May 19, 2026; its shares closed up 1.85% at Rs.27.50.

Sri Lanka's rupee sold at Rs.345.50 to the US dollar (TT selling) on May 20, with intraday spot trades at 329.25–330.25; bond yields rose, with 2029–2034 maturities moving up to around 10.30–11.50%.

Colombo Stock Exchange closed down as the ASPI fell 1.98% to 21,856 amid concerns over rupee depreciation (buy 334.50 / sell 343.50). Top negatives included Melstacorp, Sampath Bank, John Keells, Ceylinco Insurance and HNB; Swisstek rose, and Ambeon reported a Q3 loss of Rs.221.7m with its share down 4.72%.

JAAF said the Sri Lankan rupee's recent 4.8% depreciation reflects global pressures (Middle East conflict, higher fuel and shipping costs) rather than domestic weakness, and that a managed weaker rupee can boost apparel export competitiveness, jobs and FX earnings.

Sri Lanka Customs collected 122 billion rupees in the first 18 days of May, about 65% of the month's 187.8 billion-rupee target. Higher collections reflect stronger enforcement and rebounding imports, but a 50% surcharge on vehicle import duty from May 16 may reduce future customs revenue.

Sri Lanka recorded 22,473 new active credit cards in March, raising total active cards to 2,215,853 (a 1% month-on-month increase). Growth was driven by economic recovery, lower interest rates and bank promotions, though fuel rationing and potential policy tightening may slow future gains.

Rupee weakened, closing at Rs. 326.92 per USD (previously Rs. 325.62) with spot trades ranging Rs. 327.85–328.90 as depreciation continued. Officials cited global uncertainty, Middle East tensions, higher oil prices, importer demand and delayed export conversion; Central Bank says it follows a flexible exchange rate.

The Sri Lankan rupee fell to record lows, with the Central Bank reporting a USD buying rate of Rs. 332.08 and a selling rate of Rs. 342.70, the highest since March 20, 2023.

Secondary bond market turned bearish and yields rose for a second day, with some maturities trading up to 11.48%, ahead of today's Rs.140 billion T-Bill auction. Net liquidity surplus was Rs.181.68bn and USD/LKR spot traded around Rs.328 with $76.25m volume.

Telegraphic transfer rate quoted at 334.50/343.50 LKR per USD and local government bond yields were higher across the curve, e.g. 15.06.2029 at ~9.05/9.20% and the long end around 11.30–11.60%.

Foreign investors sold a net US$14.77mn (4,725m rupees) of Sri Lanka government securities in the week to May 14, making rupee bonds a net outflow for the year amid renewed rupee depreciation fears. The rupee is down over 5% YTD and a 35% fuel price hike has pushed inflation higher, pressuring central bank policy.

Sri Lanka's rupee weakened intra-day (trades 327.85–328.90) and the telegraphic transfer rate was 330.50/339.50; government bond yields rose across maturities (e.g., 15.03.2028 closed at 9.75/85% up from 9.65/75%).

Sri Lanka's rupee weakened to TT 328.50/337.50 to the dollar and government bond yields rose, with the 15.12.2029 quoted at 10.05/15% (up from 10.00/10%) and longer-dated bonds around 11.20–11.50%; the ASPI was up 0.90% at 22,513.