News & market updates

Foreign investors sold about $6.23m of Sri Lanka government securities in the week to Nov 20, marking a second consecutive weekly sell-off amid pressure from a depreciating rupee. Foreign holdings had hit a two-year high earlier in November despite the recent outflows.

The IMF Executive Board will take up Sri Lanka's fifth Extended Fund Facility review on December 15, which would entitle Sri Lanka to a SDR 254 million (about USD 358 million) tranche. The review follows a 2026 budget passed by parliament and comes amid concerns noted about past program-linked currency collapses.

Sri Lanka's Public Debt Management Office will auction US$50mn in Domestic Dollar Bonds on 1–3 Dec 2025 (settlement 10 Dec) in 1-, 2- and 3-year tenures with fixed rates set by competitive bidding; minimum investment US$1mn, eligible investors are locally incorporated licensed commercial banks and issuance may be upsized up to 3x.

Secondary bond market yields remained broadly steady, with 2028 tenors around 9.00%–9.08% and T‑bill yields at 7.52% (91d), 7.91% (182d) and 8.03% (364d). The weekly T‑bill auction was undersubscribed (raised Rs 63.12bn of Rs 86bn offered), foreign holdings saw net outflows of Rs 1.87bn, and USD/LKR closed near Rs 307.80/307.95.

Sri Lanka's debt office offered $50 million of 1- to 3-year forex-denominated bonds targeted at local banks, with an option to increase the amount; fixed rates will be determined through competitive bidding.

Sri Lanka's rupee opened flat at 307.80/308.00 to the US dollar while government bond yields were mostly steady (e.g., the 15.03.2028 bond ~9.00%). The ASPI was down 0.04% at 22,973.

Sri Lanka will inject Rs100 billion over five years to take over state bank loans of SriLankan Airlines, with Rs25 billion to be paid in 2025. Loans will be restructured from April 2026 (rupee loans to SLFR+1, dollar loans cut to ~6%), with a day-one loss of about Rs13 billion.

Sri Lanka's rupee closed at 307.80/95 to the US dollar on Friday, depreciating over the week from 306.90/307.20 last Friday while government bond yields were broadly steady (e.g., 15.12.2026 at 8.15-8.25%, 15.03.2028 at 9.00-9.05%). It has fallen from 292.58 in Dec 2024 despite record current-account surpluses and a sharply reduced budget deficit.

The government reached an agreement-in-principle with bondholders of SriLankan Airlines on debt restructuring, a crucial breakthrough that still requires IMF and Official Creditor Committee non-objection to proceed.

First Capital Research says the Colombo market PE has risen above its 18-year average as the ASPI is up ~45% YTD and market capitalisation climbed 45.3% to ~Rs.8.28t, with corporate earnings estimated +25% in 2025. FCR expects moderation in 2026 (GDP 3–4%, earnings ~17%) as a weaker rupee raises import costs, weighing on consumption, though construction, tourism and exporters remain relatively well positioned.

Secondary government bond yields consolidated for a third consecutive session with healthy secondary market turnover of Rs.19.97bn and several block trades; selected tenors saw rates dip (e.g., 01.07.30 traded 9.58%-9.62%). Money-market rates: overnight call 7.93%, repo 7.96%, net liquidity surplus Rs.102.60bn; USD/LKR closed at Rs.308.10/308.30.

Authors argue Sri Lanka's central bank should lower its 7.75% benchmark rate, saying high real rates harm growth and debt sustainability despite inflation below target and gross official reserves above $6 billion; Q2 2025 GDP rose 4.9%.

Sri Lanka's rupee opened at 307.90/308.00 to the US dollar, sharply weaker than 305.50/306.00 a week earlier. Bond yields were broadly steady and the CSE opened lower (ASPI down 0.15%), with analysts citing central bank buy-sell swaps, import dynamics and flexible exchange-rate policy as drivers of the depreciation.

Ceylon Electricity Board received 153 bids for a tender to install sixteen 10MW/40MWh battery energy storage systems, with the lowest indicative cost around Rs17 per kWh after charging and evaluation ongoing. CEB also received ~3.77 USc/kWh bids for a 50MW wind plant (~Rs11.60 at the quoted exchange rate) and is offering Rs45.80 for stored solar sales at night.

Sri Lanka's rupee strengthened to 308.10/30 per US dollar from 308.10/50, while government bond yields were broadly steady; the 15.12.2026 bond closed at 8.15/25%, the 15.03.2028 at 9.00/05% and the 01.07.2030 at 9.57/59%.

Sri Lanka's rupee opened weaker at 308.30/50 to the US dollar, while government bond yields were broadly steady with small upticks across several maturities. The ASPI rose 0.12% to 23,056 and the S&P SL20 fell 0.27% to 6,379.

Sri Lanka will complete restructuring 99% of its external debt after agreeing to exchange a sovereign‑guaranteed SriLankan Airlines bond for new 4% amortizing sovereign bonds and $60m in cash; about $250m remains outstanding due to a holdout creditor.

Weekly Treasury Bill auction yields held broadly steady: 91-day 7.52%, 182-day 7.91%, 364-day 8.03% (down 1 bp), while the auction was undersubscribed at 73.4% (Rs.63.12bn of Rs.86bn). Secondary bond yields consolidated, overnight call/repo ~7.93%-7.96%, and USD/LKR closed marginally firmer at 308.10/308.50.

SriLankan Airlines group posted a group net loss of Rs12.6bn up to August 2025, versus Rs4.2bn a year earlier, driven mainly by Rs8.5bn in forex losses as the rupee depreciated. The Finance Ministry said the Cabinet approved restructuring to convert or defer selected local government and state-bank loans to ease liquidity.

Sri Lanka's rupee closed stronger at 308.10/50 to the US dollar (from 308.25/75), while government bond yields were broadly steady — the 15.12.2026 issue around 8.05-8.15% and the 15.03.2028 around 9.00-9.03%.

Foreign investors sold $3.07m (920 million rupees) of Sri Lanka government securities in the week to Nov 13, cutting foreign holdings from a two‑year high amid depreciation pressure on the rupee. Foreign holdings stood at 140.4 billion rupees as of Nov 13.

Sri Lanka's rupee opened at 308.20/40 to the US dollar, slightly stronger than 308.25/75 the previous day, while government bond yields were broadly steady (e.g., the 15.09.2029 bond quoted at about 9.45–9.47%).

Long end of the secondary bond market saw strong buying, pushing long-dated yields lower; this week's weekly T‑Bill auction offers Rs.86 billion versus about Rs.114.27 billion maturing (fourth consecutive undersized offer). Net liquidity surplus was Rs.87.79 billion and USD/LKR closed at 308.25/308.75.

Sri Lanka's rupee weakened to 308.25/75 per USD from 307.00/25, while government bond yields were broadly steady; the 15-Dec-2026 paper was around 8.10–8.20% and longer maturities ranged roughly 8.95–10.57%.

Sri Lanka signed a bilateral agreement with Denmark to reschedule about USD 39 million of outstanding debt, a milestone in its External Debt Restructuring Process. The government says the move will help restore debt sustainability and support economic recovery.

Sri Lanka's rupee opened weaker at 307.15/25 per USD while government bond yields were broadly steady; a Rs.86,000 million Treasury bill auction is scheduled for 19 Nov. The ASPI traded down 0.33% at 23,300.

Ceylon Electricity Board posted a 85% drop in September-quarter profit to 3.5 billion rupees, with revenues down 2% and cost of sales up 12%. A 20% tariff cut in January and denied tariff hikes have driven a nine-month loss of 9.5 billion and accumulated losses to 413 billion rupees.

The secondary Treasury bond market opened subdued with yields edging up and total traded volume of Rs. 15.75 billion on 14 November. Money-market liquidity showed a surplus of Rs. 87.64 billion and USD/LKR closed marginally weaker at Rs. 307.00/307.25.

The RMB Internationalisation Forum 2025 in Colombo promoted greater use of the Chinese yuan for Sri Lanka–China trade, noting cross-border RMB settlements topped 35 trillion yuan in H1 2025. Officials said wider RMB use could reduce exchange-rate risk, lower transaction costs and boost FDI while exploring digital settlement mechanisms.

Sri Lanka's rupee weakened to 307.00/25 per USD on Monday and government bond yields edged slightly higher. Quoted yields included 15.12.2026 at 8.10/15%, 15.03.2028 at 8.95/9.00%, 15.12.2029 at 9.45/50% and 01.07.2030 at 9.58/62%.