News & market updates

US dollar eased ahead of the US PCE inflation print after the Fed left rates unchanged at 3.50%-3.75% and removed guidance on additional rate moves; the DXY trades near 100.70 after a 13‑month high, with markets also watching global PMIs, oil and gold.

LankaRates.com offers a free website that aggregates rates from 60+ banks and finance companies—exchange rates, fixed deposits (including foreign-currency), savings, money market and gold—providing history charts and source-linked, regularly updated figures for easy comparison.

The U.S. and Iran signed an interim peace deal extending the ceasefire by 60 days, leaving Asian stocks largely steady while oil prices dipped (U.S. crude $75.83, Brent $78.41); investors also digested Fed officials' hawkish comments that lifted yields and shifted market sentiment.

Vallibel Finance (VFIN.N0000) opened three new branches in Nelliady, Puthukkudiyiruppu and Kilinochchi on 8–9 June 2026. The branches will provide services including leasing, fixed deposits, gold loans and auto draft facilities backed by modern technology to improve financial access in the Northern Province.

Brent crude fell below $80, down more than one-third from recent peaks after reports the U.S. will waive sanctions on Iranian oil, easing inflation fears and pushing global bond yields lower ahead of Kevin Warsh's debut as U.S. Fed chair. Markets awaited Warsh's guidance on future rate moves.

Fitch says Sri Lanka's central bank tighter capital rules for gold-backed loans (10% risk weight for LTV<70% from 1 Sep) will be manageable for banks but hit finance companies harder; Asia Asset Finance, L B Finance, UB Finance, HNB Finance and MBSL face the largest capital impacts.

The Bank of Japan raised its policy rate to 1%, the highest since 1995, as Asian stocks made modest gains while initial optimism over a preliminary U.S.-Iran deal cooled. Brent crude fell to $82.96 a barrel and gold rose, with mixed currency and equity moves across the region.

Fitch says Sri Lanka’s new risk weights for gold loans (10% for <70% LTV; 40% for 70–100% LTV; 100% for >100% LTV) will raise average risk density to ~12% for banks and ~26% for finance firms and could cut finance companies’ Tier‑1 ratios by ~1pp to a little over 5pp, with Asia Asset Finance most affected.

Fitch says the CBCSL directive raising risk weights on gold-backed loans will raise average risk density to ~12% for rated banks and ~26% for finance companies, cutting banks' CET1 by ~2–35bp and finance companies' Tier‑1 by about 1pp–>5pp. Asia Asset Finance, L B Finance, UB Finance, HNB Finance and MBSL are singled out as most affected.

Asian share markets surged and Brent crude fell about 4% to $83.80 after a tentative US–Iran deal eased supply concerns, reducing inflationary pressure and lessening the need for tighter policy as central banks meet this week; U.S. yields fell and the dollar weakened.

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.

Allianz Insurance Lanka has partnered with Dedigama Group to allow Dedigama branch staff at an islandwide network of over 350 pawning outlets to provide information, collect premiums and print temporary insurance certificates, expanding customer access.

LOLC Finance PLC inaugurated a new Gelioya branch on 21 May 2026 and relocated its Galenbidunuwewa branch on 22 May 2026, expanding its islandwide branch network. The moves aim to improve financial access for individuals, SMEs and entrepreneurs as the company grows its network of over 200 branches.

Allianz Insurance Lanka has partnered with Dedigama Group to let Dedigama branch staff islandwide collect insurance information and premiums and print temporary insurance certificates, expanding customer access through over 350 pawning outlets.

Siyapatha Finance PLC opened a new fully fledged branch in Boralesgamuwa, expanding its countrywide network to 63 branches.

Sampath Bank's wholly owned subsidiary Siyapatha Finance PLC opened a new branch in Boralesgamuwa, expanding its islandwide network to 63 branches. The branch will offer lending, deposits, gold financing and digital Smart Pay services and Siyapatha holds a Fitch National Long-Term Rating of A(lka) (Stable).

LOLC Finance (LOFC) reported PAT of Rs. 27.4bn for the year to 31 Mar 2026, with underlying profitability up close to 30% and gross loans rising to Rs. 423bn (total assets Rs. 559bn). The company also saw improved asset quality (net NPL ~3.24%), higher deposits and strong capital ratios.

Central Bank cut LTV caps on motor financing (to 60% from 70% for >1yr vehicles; to 40% from 60% for newer/unregistered) and on gold loans (to 70% from 80%); Fitch says the tighter caps should strengthen lenders' risk profiles, especially finance companies.

Fitch says Sri Lanka’s central bank cut motor-vehicle LTVs to 60% (from 70%) for vehicles registered over one year and to 40% (from 60%) for newer/unregistered vehicles, and lowered gold-loan LTVs to 70% (from 80%). Fitch expects the caps to strengthen lenders’ risk profiles—especially finance companies with large gold/vehicle exposures—but may curb volumes and earnings for those firms.

Fitch says Sri Lanka's Central Bank cut LTV caps on motor financing (to 60% from 70% for vehicles >1yr and to 40% from 60% for newer/unregistered vehicles) and reduced gold-loan LTVs to 70% from 80%, measures that should strengthen lenders' risk profiles but may weigh on volumes and earnings, especially at finance companies.

HNB Finance PLC reported FY 2025/26 PAT of Rs. 1.68 billion, up 120% year-on-year, and PBT of Rs. 3.9 billion. Total assets rose 61% to Rs. 94.4 billion, lending grew 70% to Rs. 76.3 billion, leasing rose 98% and gold loans increased 80%.

Asian shares rose and Brent crude traded near $100/bbl as markets awaited developments in US‑Iran talks and central bank commentary on inflation and interest rates. Investors also tracked currency moves, a likely RBNZ rate hold and gains in gold.

Brent crude fell 6% to $97.43/bbl as hopes of a US–Iran deal eased supply fears around the Strait of Hormuz. Global stocks rose and gold climbed 1.46% to $4,574/oz amid the moves in energy and currency markets.

The Central Bank of Sri Lanka said banks increased their willingness to lend in 1Q 2026, with loan demand rising across retail, corporate, SME and SOE sectors and overall NPLs declining; banks expect lending to rise further in 2Q while warning that geopolitical tensions and supply disruptions pose risks.

The Central Bank of Sri Lanka has set a maximum LTV of 70% for gold‑secured loans and tightened motor vehicle financing LTVs by 10 percentage points, effective from the 25th; the measures apply to licensed banks, finance companies and leasing firms.

Sri Lanka's central bank capped loan-to-value for gold-backed credit at 70% and tightened motor-vehicle loan LTVs by 10 percentage points, effective May 25. The measures apply to licensed banks, finance companies and leasing firms (including renewals) as macroprudential steps to curb rapid credit growth and asset-price volatility.

The Central Bank of Sri Lanka introduced a 70% maximum LTV for gold-secured credit and tightened motor-vehicle LTV limits by 10 percentage points, effective 25 May 2026. The measures apply to Licensed Banks, Licensed Finance Companies and Registered Finance Leasing Establishments to curb rapid credit growth and systemic risk.

Asian shares were mixed and global bonds recovered after U.S. President Donald Trump paused a planned attack on Iran, sending Brent crude down over 2% to $109.41/bbl and 10-year U.S. Treasury yields easing to about 4.60%. Nvidia earnings due Wednesday will test AI-driven market sentiment.

Asian stocks fell as drone attacks in the Gulf pushed Brent above $111/bbl and global bond yields higher (US 10-year ~4.63%), raising inflation and tightening risks; Nvidia and major retail earnings this week will test equity resilience.

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.