News & market updates

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.

Secondary bond yields rose this week amid Middle East tensions and higher Brent crude, with the 15.12.27 at 9.20%, 15.10.29 at 10.00% and the 01.06.33 at 11.05%. Money-market liquidity showed a Rs.183.53bn surplus (Rs.151.18bn at SDFR 7.25%), the CB drained Rs.75bn via overnight repo at 7.73%, and USD/LKR traded 326.50–327.50 ($86.5m volume).

The ASPI fell 2.59% (592.28 points) to 22,313.47 — its third-largest single-day points decline — as the CSE closed sharply lower with turnover nearly Rs.4.9bn and foreign net outflow of Rs.114.3m. Key negative contributors included John Keells, RIL Property, Hayleys, Commercial Bank and Colombo Dockyard while capital goods and banking sectors led turnover and losses.

HNB Stockbrokers says Sri Lanka's three-month fuel subsidy (Rs100/l diesel, Rs20/l petrol) will cost about Rs.57 billion and could rise to roughly Rs.150 billion if extended to year-end, risking erosion of fiscal buffers and conflicting with IMF cost-recovery pricing and targeting requirements.

Sri Lanka's rupee had no spot closing quote after trading between 326.50–327.50 to the dollar and the TT rate was 327.5000/334.5000, while government bond yields rose across maturities (e.g. 15.12.2027 closed at 9.10/30% vs 9.00%).

Deputy Finance Minister Anil Jayantha urged Sri Lankans to cut fuel use as higher oil imports and four rounds of price hikes (~40% since Feb 28) are putting depreciation pressure on the rupee; the state fuel retailer spent $1bn on imports in the first four months versus $1.5bn for full year 2025.

Gold fell to a 1.5-month low as Middle East tensions lifted oil, raising inflation fears and higher-for-longer rate expectations; spot gold was down 1.1% at $4,488.99/oz. Markets see about a 50% chance of a Fed hike by December, and India curbed silver imports to ease rupee pressure.

No spot quote for the Sri Lanka rupee early Monday and bond yields edged up slightly. The ASPI fell 1.59% to 22,542 while the S&P SL20 rose 1.24% to 6,206; USD TT rates were 326.50/333.50.

The state-owned Ceylon Petroleum Corporation spent nearly US$1 billion on oil imports in the first four months of the year — about two-thirds of its full-year 2025 bill of US$1.5 billion. The Central Bank governor said this is boosting foreign-exchange demand as fuel is being imported at higher prices after the Middle East escalation.

Central Bank Governor told Parliament that increased imports—especially petroleum by the state fuel retailer—and slower tourism have pressured foreign exchange, contributing to a 4.5% fall in the rupee through May 15. He said oil import bills rose sharply while exports have not kept pace, though remittances are holding up.

Finance Ministry imposes a temporary 50% surcharge on existing Customs import duty for imported vehicles effective 16 May for three months, with LCs opened on or before 15 May exempt. The measure (excluding motorcycles, three-wheelers and commercial vehicles) aims to curb non-essential imports and ease pressure on foreign reserves.

Amana Bank (ABL.N0000) reported Q1 2026 PBT of Rs.0.8bn (+14% YoY) and PAT of over Rs.0.5bn (+16% YoY). Net financing income rose to Rs.2.2bn (+14%), total operating income to Rs.2.7bn (+13%), CASA 44%, CET1 13.2%, and Stage 3 NPA 1.2%.

Treasury Bond auction accepted weighted-average yields in line with or below expectations but was undersubscribed, raising Rs.176.62bn of Rs.250bn offered. Stronger fiscal data (Feb revenue +35.5% YoY; primary surplus +66.1%) supported bond-market resilience while USD/LKR traded 321.90–326.00 and T-bill yields eased.

People’s Bank said an exchange-rate application error in a remittance system caused excess payments totalling about Rs. 656 million (May 2023–Mar 2026); the issue has been fixed, the amount has been recognised in its financials, recovery is underway and no further impact is expected.

The IMF Executive Board will decide on May 27, 2026 on the Fifth and Sixth reviews of Sri Lanka’s EFF; approval would give Sri Lanka access to about US$700 million in financing.

People's Bank identified and rectified an exchange-rate error in a remittance system that caused approximately LKR 656 million in excess payouts; the amount has been fully recognized in its financial statements, recovery efforts are underway, and no further financial impact is anticipated while operations remain normal.

Sri Lanka has imposed a temporary 50% surcharge on Customs import duty for new personal vehicles for three months from May 16, raising duty to 45% from 30% for orders placed through Aug 15 to curb imports and limit rupee depreciation. Motorbikes, three‑wheelers and commercial vehicles are excluded and LCs opened by May 15 are exempt.

The Sri Lankan rupee weakened, with the Central Bank's USD selling rate at Rs. 331.15 and buying rate at Rs. 323.53 on 15 May — the weakest selling rate since Dec 2023 — extending depreciation amid global shipping, energy and fertiliser shocks.

Central Bank Governor Nandalal Weerasinghe warned lowering Sri Lanka's inflation target to 2% would require strict monetary tightening and higher interest rates that would compromise economic growth. The bank currently targets 5% under a flexible exchange rate and the three-year agreement with the Finance Ministry ends in August.

No spot quote was available for the Sri Lankan rupee on Friday after intraday trades between 325.10 and 326.00 to the dollar; the telegraphic transfer rate was 325.00/332.00. Government bond yields were broadly steady, with maturities from 2028–2034 around 9.70–11.20%.

Central Bank daily rates: USD buying Rs.323.53 and selling Rs.331.15, with the selling rate surpassing Rs.331 for the first time since Dec 22, 2023; the USD/LKR spot rose to Rs.324.71, the highest since Dec 28, 2023.

Sri Lanka Telecom PLC reported 1Q2026 consolidated revenue of Rs.30.8bn (up 10.6% YoY) and PAT of Rs.3.1bn (up 53.3%), driven by broadband demand; SLT PLC standalone revenue was Rs.19.7bn with PAT of Rs.2.1bn, supported by cost efficiencies and FX gains.

Sri Lanka's rupee was quoted at 325.25/326.25 to the US dollar on Friday, while government bond yields were broadly steady with the 15.09.2029 tenor quoted at 9.95/10.00%. The All Share Price Index was up 0.26% (60.26 points) at 22,959 and the S&P SL20 rose 0.31% to 6,286.

The Sri Lankan rupee has fallen more than 5% so far this year, risking higher inflation and possible monetary tightening that would raise borrowing costs; rising import, fuel and medicine prices threaten household purchasing power and could drag on growth.

Secondary bond yields edged up, with the 01.10.32 maturity trading at 10.75% and other maturities between 8.40%–10.10%; the Treasury raised Rs.13bn (the full amount offered) from a Rs.73.08bn subscription via the Direct Issuance Window. Net liquidity surplus was Rs.253.75bn and USD/LKR traded at 324.25–325.00.

SLT‑MOBITEL reported Q1 2026 group revenue up 10.6% to LKR 30.8 billion and profit after tax up 53.3% to LKR 3.1 billion. SLT PLC revenue was LKR 19.7bn (+10.6%); Mobitel revenue rose 9.9% with broadband revenue up 28%.

Dealers gave no spot quote for the Sri Lankan rupee on Thursday (one-week 326.00/327.00 previously), while bond yields edged up — TT dollar 323.50/330.50 and government bonds rising to roughly 9.65%–11.20%.

US dollar strengthened to Rs. 323.95 on May 14, with the selling rate rising to Rs. 329.92 — the highest since Dec 28, 2023; the buying rate increased to Rs. 322.28.