News & market updates

ADB President Masato Kanda met CBSL Governor Nandalal Weerasinghe on 23 June to discuss current economic developments, ongoing reform efforts and central bank policies. The meeting included senior Sri Lankan officials and ADB representatives during Kanda's three-day visit.

The Middle East conflict threatens Sri Lanka’s migration and remittance flows — about half of remittances originate in the ME, and up to ~19,980 foreign employment opportunities could be lost in a month if disruptions continue. This would pressure foreign reserves, import capacity, unemployment and consumption, slowing the economic recovery.

Sri Lanka's rupee recovered to 313.00/50 against the US dollar and bond yields opened lower as oil prices fell, with the Central Bank keeping the Overnight Policy Rate unchanged at 7.75%. The ASPI was down 2.90% and an 80,000 million rupee T-bill auction was ongoing.

Stocks rose and Brent crude fell about 6% to $98.30/bbl after reports the U.S. sought a month-long ceasefire with Iran; S&P 500 futures were up 0.9% and European futures 1.2%. Bond yields eased a few basis points even as markets still price further central-bank rate hikes.

The Central Bank of Sri Lanka kept the Overnight Policy Rate at 7.75% and said low inflation (1.6% y/y in Feb) provides space to absorb higher energy costs, forecasting inflation will reach 5% in Q2-2026. It noted USD 7.3bn reserves, some rupee depreciation pressure and risks to tourism, trade and remittances.

Monetary Policy Board kept the Overnight Policy Rate unchanged at 7.75%. Inflation was 1.6% y-o-y in Feb 2026 and is expected to reach 5% in Q2-2026; the board cited higher global energy prices, Middle East conflict risks, and FX reserves of USD 7.3bn as key considerations.

ADB raised Sri Lanka's allocation for this year to $480m (up from $380m) and will promptly release $200m. The Cabinet has approved plans to secure $620m for five sub-programs covering trade/industrial development, MSME finance, water/sanitation rehabilitation, resilience and agricultural value-chain support.

ADB announced a financial support package including fast-disbursing budget support and reactivated trade and supply-chain finance (including for oil imports) to help developing member countries manage economic fallout from the Middle East conflict. The bank will use countercyclical resources and monitor energy, inflation and financial conditions.

President Dissanayake directed the Agriculture Ministry and fertiliser importers to secure urea supplies for the 2026 Yala season; 125,000 mt is needed, stocks fell from 102,000 mt on 1 March to ~68,000 mt by 17 March, and 77,000 mt more have been ordered (21,000 mt due end‑March/early April). He also urged expedited payments to suppliers and discussed storage and credit facilities to maintain buffer stocks.

Cabinet approved a fee-free QR payment program for transactions below Rs. 5,000 to boost digital payments and financial inclusion. Officials noted LankaQR logged about 274,000 transactions worth Rs. 1.18 billion in Q3 2025 (avg ~90,000/month; avg txn value < Rs. 5,000).

The Cabinet approved expansion of a concessional loan scheme offering youth loans at a 4% annual rate via state banks, allocating Rs. 500 million in the 2025 Budget and an additional Rs. 750 million in the 2026 Budget to support young entrepreneurs in agriculture and industry.

Secondary government bond yields swung amid Middle East tensions and ahead of the Central Bank's 2nd Monetary Policy Review due today, with the 15.02.28 maturity at 9.50% and longer maturities trading up to 10.90%. The weekly T-bill auction offers Rs.80bn (below ~Rs.87.17bn maturing) and USD/LKR closed around 314.00/314.40.

Commercial Bank won the Gold Award for "Excellence in Digital Payments" at the LankaPay Technnovation Awards; Hatton National Bank took Bronze, LOLC (LOLC Finance) won Gold in the non-bank financial institutions category and L B Finance was runner-up. LankaPay reported total transactions of Rs.42 trillion in 2025, with real-time payments at Rs.23 trillion.

JXG, parent of the Janashakthi Group, has launched a LKR 5 billion IPO offering 500 million shares at LKR 10 each (21.74% post‑IPO stake), opening 9 April 2026; Deloitte values JXG at LKR 15.92/share (37.18% discount). Proceeds will fund expansion (LKR 3.5bn), regional growth (LKR 0.5bn) and debt repayment (LKR 1bn).

Sri Lanka's ASPI rose 3.38% to 21,784.11 and the S&P SL20 climbed 3.63% to 6,123.82; market turnover was Rs.2.3bn. Top contributors included Hatton National Bank, Commercial Bank, John Keells, Melstacorp and Dialog, while food, beverage & tobacco led turnover (Rs.834m).

Senior leaders from Sri Lanka's banking sector met in Colombo on 17 March at the "Fraud Management Deep Dive 2026" co-hosted by IFINITY and BPC to discuss strengthening enterprise-wide fraud detection, AI-driven monitoring and regulatory incident reporting as digital payments expand.

Janashakthi Ltd. is launching a Rs.5 billion IPO on 9 April offering 500 million shares (21.74%) at Rs.10 each; Deloitte values the company at Rs.15.92/share, implying a 37.18% discount to valuation (around 50% upside). The company plans to use ~Rs.4 billion for expansion into general insurance, microfinance and NBFIs including overseas markets, and Rs.1 billion to retire debt.

The ASPI rose 3.47% (706.26 pts) to 21,071.23, recovering Rs. 244 billion on reports of a possible de‑escalation in the Middle East; the S&P SL20 gained 3.91% to 5,909.23. Market turnover exceeded Rs. 4.2 billion with gains led by Commercial Bank, Sampath Bank, John Keells and Colombo Dockyard while foreigners were net sellers.

ADB announced a financial support package to help its developing member countries mitigate economic and financial impacts from the Middle East conflict, including fast-disbursing budget support and reactivated trade and supply-chain finance for oil imports. The bank will mobilize countercyclical lending and TSCFP support to address energy price volatility, supply disruptions, inflationary pressures and risks to tourism and trade.

Sri Lanka's rupee weakened to 314.20/40 per USD from about 313.00/314.00, and government bond yields edged up across maturities (e.g., the 15.10.2028 bond closed at 9.60/80% vs 9.45/65%).

Colombo Stock Exchange rose after US President Trump's pause on attacks, with the All Share Price Index up 3.31% to 21,039.77 and the S&P SL20 up 3.57% to 5,889.75. Top contributors were Commercial Bank (up 5.49% to Rs.201.75), Sampath Bank (up 2.98% to Rs.155.75), Melstacorp (up 2.14% to Rs.167.00) and DFCC Bank (up 4.45% to Rs.135); DFCC also listed 12,310,834 shares after a scrip dividend.

Sri Lanka's rupee weakened to 313.50/314.50 per USD while government bond yields edged higher (e.g. 2029 bond ~9.80–9.85%) and the All Share Price Index fell 3.61% to 21,100.98, with the S&P SL20 down 3.84%.

Global markets retreated as Brent rose ~4.2% to $104.21/bbl and U.S. crude to $91.93, while U.S. Treasury yields climbed, reversing a brief relief rally amid ongoing Middle East tensions. The dollar strengthened and spot gold fell about 1%.

Secondary Treasury bond yields initially rose on external pressures but reversed and closed lower after Brent crude plunged >10% amid US de-escalation; selected maturities traded in ranges ~8.57%-11.23% and secondary turnover was Rs.23.63bn. Money markets showed a net liquidity surplus of Rs.240.27bn and the USD/LKR spot closed around Rs.313.00/314.00.

ADB President Masato Kanda began a three-day visit to Sri Lanka to deepen economic cooperation, review development financing and macroeconomic stabilisation, and assess Cyclone Ditwah damage. He toured Colombo Port, will meet the president and private sector, and will review project pipelines and recovery needs.

Colombo Stock Exchange closed higher: ASPI +1.35% to 20,360.27 and S&P SL20 +4.24% to 5,927.87, led by gains in Commercial Bank, Sampath Bank, John Keells, Hatton National Bank and Hayleys. Market turnover was Rs.4.22bn; capital goods saw the most turnover and NDB raised Rs.16bn in a green/sustainability-linked bond.

Focus Reliance Holdings won Best Microfinance Provider at the Global Business Excellence Awards 2025 and the Microfinance Leader Award at the People’s Excellency Awards 2024 for its microfinance services. The private firm offers diverse microfinance products and has expanded into distribution and retail with an FRH supermarket in Pitakotte.

CA Sri Lanka launched a Faculty of Business Law and Regulatory Compliance to provide strategic direction and professional guidance for CA Business School programs and to train chartered accountants in business law, regulatory compliance, financial investigations and dispute resolution.

ASPI fell 1.33% to 20,364.97 as the market reacted to Middle East tensions and rising crude oil prices. Market turnover was Rs.2.37bn, the market has lost over Rs.1.1tn since 28 Feb, primary negative contributors were DOCK, JKH, RIL, DIAL and CFIN, while JKH, SINS and DIAL saw largest foreign outflows and PKME, WIND and TAP largest inflows.

Bank of Ceylon concluded a visit to India to reinforce banking and regulatory ties, meeting Reserve Bank of India officials, Sri Lankan diplomats and business leaders to explore cross-border opportunities and improve operations.