News & market updates

Foreign investors bought a net US$3.0mn of Sri Lanka government securities in the week ended July 2 as the rupee recovered to about 330 per USD; YTD net outflows remain around US$13.7mn amid recent currency volatility and rising inflation following fuel price moves and a May rate hike.

Sri Lanka's rupee closed at 334.75/85 to the US dollar, slightly firmer than the previous day, while government bond yields were broadly steady; Rs 100,000 million of Treasury bills are to be auctioned on 8 July.

Secondary bond market started the week slow with dull activity and yields broadly steady; key maturities traded around 11.25%–11.75%. Money-market liquidity surplus rose to Rs.132.29bn and USD/LKR appreciated to Rs.334.90/335.

CBSL extended the suspension of Perpetual Treasuries Ltd from carrying on primary dealer activities for a further six months effective 4:30 p.m. on 5 July 2026. The extension is to allow the CBSL to continue its investigations.

Sri Lanka's rupee was quoted at 334.65/75 to the US dollar in the spot market on Tuesday, slightly firmer from 334.90/335.00 the previous day; domestic government bond yields edged up. For example, the 01.08.2030 bond was quoted at 11.26/33% and the 15.10.2030 at 11.30/35%.

Asian stocks drifted lower despite Samsung Electronics forecasting a 19-fold jump in Q2 operating profit, as the yen hovered near 40-year lows, oil prices rose modestly and U.S. yields inched up amid geopolitical and Fed policy uncertainty.

Frontier Research said easing Eurozone inflation and lower oil prices could narrow Sri Lanka's fuel import bill, ease inflationary pressures and reduce depreciation pressure on the rupee. It notes Eurozone headline inflation fell to 2.8% in June and markets expect the ECB to keep rates on hold, though risks from the Middle East and food prices remain.

L B Finance PLC (LFIN.N0000) topped K Seeds Investments' Category 1 ranking of finance companies for Q4 FY25/26 (Jan–Mar 2026), scoring highest across ten equally weighted KPIs. The firm achieved this position despite late-quarter oil-driven fuel-price shocks and rising inflation that pressured peers' margins and loan repayment capacity.

Sri Lanka's rupee closed at 334.90/335.00 to the US dollar (from 335.20/35), while government bond yields were broadly steady—shorter 2027 paper ~10.35–10.45% and longer-dated bonds around 11.2–11.6%.

Asian shares eased as investors awaited a key AI earnings season and oil slipped after OPEC+ raised output targets; softer U.S. payrolls and lower energy costs cut the chance of an imminent Fed hike. Futures imply about a 78% probability of no rate change at the July 29 meeting.

Sri Lanka's rupee was quoted at 335.00/40 to the US dollar on Monday (from 335.20/35), while government bond yields were broadly steady with key maturities quoted around 10.95%–11.65%.

Foreign portfolio buying in Sri Lankan rupee bonds pushed yields lower on 4- and 10-year benchmarks (e.g., 15.10.30 fell to c.11.23%, 15.03.35 to c.11.70%) even as weekly T‑bill yields rose (91-day 10.23%). Money market liquidity doubled to Rs.128.47bn, foreign holdings rose to Rs.136.86bn and USD/LKR closed near 335.20/335.30.

The Central Bank of Sri Lanka extended the suspension of Perpetual Treasuries Limited from acting as a primary dealer for a further six months with effect from 4.30 p.m. on 05 July 2026 to allow ongoing investigations.

The Central Bank of Sri Lanka has extended the suspension of Perpetual Treasuries Limited from operating as a Primary Dealer for six months from 4:30 p.m. on 05 July 2026 to allow continued investigations.

The government borrowed Rs.1.96 trillion in 2025, well below the Rs.4 trillion statutory ceiling, raising Rs.2.4 trillion via domestic Treasury Bond issuances while securing $1.23 billion in new foreign loan commitments and receiving $1.78 billion in disbursements.

Sri Lanka rupee closed at 335.20/35 to the US dollar, firming from 335.90/336.00, while government bond yields edged up slightly with selected maturities closing around 10.35%–11.65%.

Sri Lanka's rupee was quoted at 335.25/35 to the US dollar, slightly stronger than 335.90/336.00 the previous day; bond yields edged up on profit-taking, with the 01.08.2030 quote rising to 11.25/28% from 11.18/25%.

Sri Lanka sold Rs7,731 million of Treasury bills on tap at an average rate of 10.30%, bringing this week's total T‑bill sales to Rs107,731 million; the 6‑month bill settles on July 3.

Asian stocks rose (MSCI Asia-Pacific ex-Japan up ~1.3%) after a softer-than-expected US jobs report reduced near-term Fed rate-hike odds and regional PMIs showed economic expansion in June.

CBSL expects inflation to remain around 6.8% in the coming months but, aided by lower global oil prices and if expectations remain contained, sees no immediate need for another policy rate hike. The central bank raised the OPR by 100bps in late May and says tightening is already transmitting through higher market interest rates and some reductions in domestic energy prices have been observed.

Foreign institutional big-ticket buying pushed Sri Lanka's secondary government bond yields lower, with the 15.10.30 maturity trading down to 11.23%-11.35%. The rupee appreciated to LKR 335.85/336.00, net liquidity surplus was Rs.81.20bn and overnight call/Repo averages were 9.21%/9.25%.

Sri Lanka's rupee closed at 335.90/336.00 to the US dollar on Thursday, firmer than 336.20/336.40 the previous day, while government bond yields fell across maturities (e.g. 15.09.2027: 10.35–10.45%; 01.08.2030: 11.18–11.25%).

Sri Lanka's rupee was quoted at 336.35/40 to the US dollar on Thursday and bond yields fell, with quoted yields on maturities from 2029–2036 around 10.95%–11.95%.

Treasury Bill weighted average yields rose for a second consecutive week—91-day and 182-day bills up 9bps to 10.23% and 10.30%, and the 364-day up 3bps to 10.20%—with the auction raising the full Rs.100bn offered. Secondary bonds rallied on large block buying and the rupee slipped to LKR 336.20/336.40.

Union Bank (UBC) launched the Union Bank Pension Loan offering government and other pensioners up to Rs. 8 million with repayment up to 15 years, low interest and no personal guarantor; benefits include Rs.30,000 of annual PickMe rides, a Rs.7,000 yearly Nawaloka Hospitals health package and a pre-approved credit card.

Sri Lanka's rupee closed at 336.20/40 to the US dollar on Wednesday; bond yields were broadly steady, with the 15.09.2027 issue at 10.35/50%, 15.03.2028 at 10.55/65%, 15.12.2029 at 11.00/05% and 01.08.2030 at 11.30/38%.

Yields on Sri Lanka Treasury bills rose across maturities at Wednesday's auction and all 100 billion rupees offered were sold. The 3-month rose 9bps to 10.23%, the 6-month rose 9bps to 10.30% and the 12-month rose 3bps to 10.20%.

Fitch says Asia investors in June 2026 are focused on AI disruption, private credit expansion and sovereign risk, flagging AI and digital-infrastructure overspend as emerging credit risks. Investors also flagged opacity and liquidity risks in private credit and noted sovereign vulnerabilities in Indonesia amid currency and policy concerns.

Sri Lanka's telegraphic transfer rate was 331.6619/341.3051 LKR per US dollar (buy/sell); euro and pound rates were also reported. A Rs.100,000 million Treasury bill auction is ongoing.

Sri Lanka sold an additional Rs6 billion of on-tap Treasury bonds, bringing the week's total sales to Rs66 billion; the 15 Oct 2030 bond yielded 11.44% and the 15 Mar 2035 bond yielded 11.88%, with settlement on July 1.