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Sri Lanka's rupee closed at 330.65/80 to the US dollar, slightly firmer from 330.70/90; government bond yields fell across the curve. Example moves: the 01.08.2030 bond to 11.10-11.20% (from 11.25-11.35%) and the 15.10.2034 bond to 11.95-12.00% (from 12.05-12.10%).
Sri Lanka sold the full Rs80 billion of Treasury bills at Wednesday's auction as yields rose across maturities: 3‑month 9.25% (+5bp; Rs41.87bn sold), 6‑month 9.41% (+4bp; Rs28.9bn sold) and 12‑month 9.95% (+2bp; Rs9.2bn sold).
Central Bank Governor Nandalal Weerasinghe said the government's Rs.41 billion diesel subsidy (on top of Rs.57 billion provided April-June) and a temporary 50% surcharge on new vehicle import duty helped curb inflation. The CB raised its policy rate by 100 basis points in May; inflation hit 8% in August, above the 7% upper band.
The Central Bank said private sector credit growth slowed to 24.5% year-on-year in August from about 30% after May's monetary tightening, but remains sufficient to support economic growth. Sri Lanka's GDP growth eased to 4.2% year-on-year and the bank still expects around 5% for the year.
Sri Lanka's rupee was quoted at 330.68/75 to the US dollar (from 330.70/90) while bond yields were steady to lower-e.g. the 01.08.2030 bond at ~11.15-11.17% and the 01.11.2033 at ~11.88-11.95%-as an 80,000 million rupee T‑bill auction was ongoing.
The Central Bank kept the Overnight Policy Rate at 8.75% and said headline inflation, which hit 8% in August, is projected to remain in high single digits through Q1-2027. It cited pass-through from an energy shock and said reserves rose to about USD 6.9bn while the external sector remained resilient.
The Central Bank maintained the Overnight Policy Rate (OPR) at 8.75% after its Monetary Policy Board meeting, citing resilient growth and elevated inflation. Headline inflation rose to 8.0% (y/y), gross official reserves were USD 6.9bn, and the next policy review is on 20 November 2026.
Frontier Research forecasts the rupee will appreciate to about Rs.325/$ by end-2026 and Rs.315/$ by end-2027, with point-to-point inflation turning negative by mid-2027. It also expects 12-month T-bill yields to fall 50-100bp this year and about 100bp in 2027, and notes Brent crude movements will influence the path.
Secondary government bond yields rose across key maturities as selling interest pushed yields higher ahead of today's Monetary Policy Review; a Rs.80 billion T‑bill auction (91/182/364-day) is scheduled. The rupee appreciated marginally to about Rs.330.75/330.90 and money-market liquidity showed a net surplus of Rs.151 billion.
WindForce PLC has abandoned its planned Rs. 4 billion listed green bond issue and withdrawn the listing application, citing adverse market conditions; the company pointed to a markedly shifted interest-rate environment after recent CBSL rate hikes and higher government bond yields.
Foreign investors sold a net Rs 9,169 million (US$27.8m) of Sri Lanka rupee bonds in the week to Sept 25, the second straight week of net selling and taking the two-week net outflow to Rs 16.5 billion; foreign holdings fell to Rs 196.9 billion.
Sri Lanka's rupee closed at 330.70/90 to the US dollar in the spot market, marginally firmer than the previous day's 330.90/331.05. Government bond yields edged higher across several maturities (e.g. 01.08.2030 at 11.25/35%, 15.10.2030 at 11.30/40%).
WindForce PLC withdrew its initial listing application for a proposed green bond (up to 40 million bonds to raise Rs 4 billion) due to adverse market conditions. Fitch withdrew the 'A(lka)' rating after the issuance was postponed amid rising market interest rates.
Sri Lanka's secondary government bond market turned bearish with yields rising across maturities, for example the 15.10.34 at 12.00% and the 15.06.35 at 12.15%, as selling intensified ahead of the central bank policy decision. Bloomberg expects the CBSL to hold the policy rate at 8.75% on Sept 30 amid rising inflation from higher food and fuel and mixed FX trends.
Sri Lanka's rupee was quoted at 330.90/331.10 to the US dollar on Tuesday, slightly weaker than the prior day, while government bond yields opened broadly steady with only small moves across maturities. An 80,000 million rupee Treasury bill auction is scheduled for Sept 30.
Sri Lanka rupee closed weaker at 330.90/331.05 to the US dollar on Monday, while government bond yields rose across maturities. For example, the 01.08.2030 note moved to about 11.25/11.30% from 11.13/11.20%, and the 15.12.2032 note to 11.75/11.85% from 11.65/11.75%.
Asian stocks slipped as Brent futures rose 2.1% to $106.49/bbl and US crude hit $93.84, while rising bond yields lifted odds of further central-bank rate hikes and kept markets on edge.
Sri Lanka's government debt market was volatile but ended lower-to-steady across the curve, with T-Bill yields rising for a second week: 91-day 9.20%, 182-day 9.37% and 364-day 9.93% after the auction. Money-market liquidity stayed elevated at ~Rs.371bn, foreign holdings of rupee treasuries fell below Rs.200bn and the rupee appreciated to ~Rs.330.45.
Sri Lanka's rupee was quoted at 330.50/65 to the US dollar in the spot market, while government bond yields edged lower (e.g. the 01.08.2030 at 11.13/20% and the 15.10.2030 at 11.18/25%). The All Share Price Index was up 0.06% at 21,050.
The Central Bank of Sri Lanka will announce its Monetary Policy Board decision at 7:30 a.m. on 30 Sept; the current Overnight Policy Rate is 8.75% and headline inflation rose to 8.0% YoY in August, above the CBSL target band.
Fitch says global growth is holding up but real policy interest rates are rising; it raised its 2026 global GDP forecast to 2.6% (up 0.2pp). Fitch expects the US Fed to hike again in December and hold rates around 4.25% next year, citing energy-price shocks and ongoing AI/IT capex as key influences on yields and growth.
Colombo stock market ended the week marginally lower (ASPI down 0.09% to 21,037.35) with subdued investor sentiment ahead of next Wednesday's Central Bank Monetary Policy announcement; market turnover was below Rs.815m and foreign investors were net sellers of Rs.193.3m.
Sri Lanka rupee was quoted at 330.15/30 to the US dollar on Friday, slightly firmer than 330.30/55 the previous day. Government bond yields were broadly steady, with the 15.10.2028 at about 10.45-10.60% and longer maturities around 10.80-12.05%.
Secondary bond yields rose across maturities-e.g., 15.12.29 at 10.75% and 15.10.34 around 11.90-11.97%-while activity remained healthy. Money-market net liquidity was Rs.111.06bn (CBS mopped up funds via repos at yields 8.74%-9.15%) and USD/LKR closed at 330.30/330.60 (rupee depreciated).
Sri Lanka sold Rs6,000 million of treasury bills on tap at average rates of 9.37% (6-month) and 9.93% (12-month), bringing total bills sold this week to Rs66 billion; market subscription was Rs12,005 million.
Sri Lanka's rupee closed at 330.30/55 to the US dollar on Thursday, from 329.50/75 the previous day. Local government bond yields were steady to slightly higher, with the 15.12.2027 issue at 10.00-10.20%, 15.10.2028 at 10.40-10.60% and modest rises in longer-dated yields.
Sri Lanka's rupee was quoted at 330.00/80 to the US dollar on Thursday, versus 329.50/75 the previous day, while government bond yields edged higher, e.g. the 15.09.2029 bond at 10.60-10.80%, 01.02.2031 at 11.10-11.20% and 15.10.2034 at 11.85-11.95%.
Australian shares slid to a more-than-three-month low as the S&P/ASX 200 fell about 1.2% to 8,658.10 after crude oil surged nearly 4%, reviving inflation worries and boosting the prospect of further Reserve Bank rate hikes.
IMF recommended Sri Lanka retain its 5% inflation target and current accountability band at the first statutory review. It said a lower target could be considered at the next review once low, stable inflation is established, while the CBSL warned a 2% target would require sharply tighter policy and higher rates.
At the weekly Treasury Bill auction, weighted average yields rose for a second week-91-day 9.20% (+2bp), 182-day 9.37% (+1bp) and 364-day 9.93% (+5bp)-with the PDMO raising the full Rs.60 billion offered. Secondary bond-market yields extended a rally supported by a sovereign rating upgrade and IMF assessment, and net liquidity surplus stood at Rs.148.87 billion following central bank repo operations.