News & market updates

CBSL cut the foreign-currency conversion window for merchandise exporters from three months to one, prompting a stronger rupee (USD buying rate fell from Rs.332.38 to Rs.324.66; selling from Rs.342.08 to Rs.335.39).

Sri Lanka's central bank cut the mandatory conversion period for exporters' foreign-currency receipts from 90 days to 30 days, requiring conversion by the 10th of the following month. The rule is intended to generate predictable monthly dollar inflows to banks to ease FX shortages and help stabilise the rupee, while tightening exporters' working-capital flexibility.

Sri Lanka's Central Bank ordered exporters to convert export dollar proceeds within one month (down from three) effective immediately to curb rupee depreciation. The move follows a $211m defence of the currency in May and a 100bp overnight policy rate hike on May 26.

CBSL's new 'Repatriation of Export Proceeds into Sri Lanka Rules No.2 of 2026' requires exporters to convert all residual foreign exchange proceeds on or before the 10th day of the month following receipt, shortening the previous three-month window; the rule takes effect after Parliamentary approval and preserves limited authorized uses and a 10% cap for investment in government FX debt.

Colombo market rebounded as the ASPI rose 0.67% to 21,547.17 with net foreign inflows of Rs. 22.6 million. Gains were led by selected blue-chip counters and heavy turnover in capital goods and food & beverage names, with notable moves in DIAL, BREW, CCS, ABAN and JKH.

Sri Lanka's cabinet approved a proposal for the Legal Draftsman to draft a bill amending the Customs Ordinance to restructure and modernize Sri Lanka Customs. A steering committee spent about seven months producing detailed recommendations after consulting importers, exporters and other stakeholders.

Sri Lanka's BOI and Japanese partners held the 4th working-level Japan–Sri Lanka Committee on Business Environment on 2 June 2026 in Colombo to review and resolve investor concerns and strengthen FDI ties. The session stressed accountability and priorities such as technology transfer, green industry, manufacturing and tourism.

The IMF approved Sri Lanka’s combined Fifth and Sixth Reviews on 28 May 2026, releasing SDR 508 million (~US$695m) and bringing total EFF disbursements to SDR 1.778 billion (~US$2.4bn). The Fund said stabilisation has improved revenues, growth and reserves but warned debt sustainability remains “very high” and key structural reforms (electricity, public financial management) are unfinished.

Fitch cut its forecast for global growth in 2026 by 0.2 percentage points to 2.4% as an oil shock from the US‑Iran conflict and a prolonged Strait of Hormuz closure lifts energy prices (Brent now seen at $87/bbl for 2026). The agency said a tech investment boom cushions activity and central banks are likely to hold rates this year amid higher inflation risks.

ASPI fell 1.57% (340.85 pts) to 21,403.28 as the CSE opened in the red amid rising interest rates and Middle East tensions. Turnover was over Rs.2.6bn with foreign net outflows of Rs.54.1m; Melstacorp, Bukit Darah, Sampath and LOLC were key negatives while John Keells and ACL led turnover and HNB rose.

The Committee on Public Finance approved a five-year tax exemption for new telecommunications towers that become operational from 1 January 2026. It also approved HS code changes, removed the textile import cess while imposing 18% VAT from 1 April 2026, exempted certain payment receipts from stamp duty, rejected telecom relief on unpaid customer bills and ordered a probe into online casinos allegedly misusing the State emblem.

The IRD has begun Phase II of Sri Lanka's Digital Invoicing System, expanding the platform to VAT-registered businesses after Phase I onboarded more than 340 companies; technical documentation has been shared with 27 export-oriented firms and 170 manufacturers, and Phase III POS integration is planned by year-end.

Colombo Stock Exchange ASPI rose 0.83% to 21,581.80 midday, led by gains in Dialog, Hayleys, Colombo Fort Land & Building and Browns Investments; Commercial Bank slipped and Hela Apparel faces a trading suspension effective June 18 unless compliance is rectified by June 16.

The SAPLING policy dialogue to advance South Asia's food processing industry opened in Ahmedabad with ~200 participants and 16 Sri Lankan delegates, including representatives of John Keells Holdings; the event spotlights innovations such as smart cold chains, digital traceability and sustainable packaging.

US President Trump signed the 'Strengthening Customs Enforcement' Executive Order giving CBP new authorities to require detailed importer ownership/supply-chain data, tighten broker due diligence, raise bond minimums and revoke importing privileges for non-compliance.

Colombo Stock Exchange slid, ASPI down 1.68% (366.31 points) to 21,377.82 at midday. Vallibel One released its annual report showing profit of 13,164,778 rupees (prev. 11,760,829) and its shares were trading down 0.41% at Rs.96.00.

Fitch cut its 2026 global growth forecast by 0.2pp to 2.4% and raised its 2026 Brent crude assumption to USD87/bbl (from USD70/bbl) due to an oil shock from the US–Iran war. Strong IT-related investment is partly cushioning the hit, while central banks’ policy paths have shifted with rates expected to hold this year and cuts delayed until 2027 in some cases.

A 16-member Sri Lankan delegation of export-oriented food and beverage firms attended THAIFEX – Anuga Asia 2026 in Thailand (24–31 May) to showcase products and pursue trade and investment opportunities. The program included a Sri Lanka pavilion, factory visits and meetings with Thai industry bodies for technical exposure and capacity building.

EU-funded UNIDO project has revised Sri Lanka’s National Green Reporting System guidelines, aligning them with GRI standards to help public and private organisations better measure and report ESG data. The updated NGRS aims to improve transparency, compliance with global requirements and access to international markets.

The Colombo ASPI fell 2.54% for the week (S&P SL20 down 2.2%), wiping about Rs. 206 billion off market capitalisation. Major negative contributors were COMB, HAYL, JKH, WIND and SPEN, with turnover near Rs. 2.98 billion.

EU supported the launch of Sri Lanka’s revised National Green Reporting System Guidelines, aligned with GRI standards and officially launched by President Anura Kumara Dissanayake. The voluntary framework aims to strengthen ESG reporting and transparency across manufacturing, commercial and service sectors to help firms meet global market requirements.

Sri Lanka's Board of Investment extended the RFI submission deadline for green hydrogen and green ammonia project proposals to June 19 (1500 hrs SLT). Eligible projects may receive BoI facilitation including fiscal incentives, infrastructure support and regulatory facilitation.

The Ceylon Chamber warned that a proposed 12.5% US labour-related tariff on Sri Lankan exports could hurt competitiveness and urged urgent high-level engagement; apparel and tea exports fell 7% and 6% respectively in the first four months of 2026.

EDB and NMRA met with pharmaceutical manufacturers in Colombo to address export barriers, citing delays in product registration and regulatory approvals as key constraints to boosting exports. They committed to aligning processes with international benchmarks to support Sri Lanka's $36bn export target by 2030.

EU-funded capacity-building programme to accelerate Eco-Industrial Park practices in Sri Lanka has been launched, targeting over 1,100 stakeholders including ~25 policymakers, 32 park operators, 475 tenant industries and 640 community members. Training covers policy, green finance, environmental management and industrial symbiosis, delivered via virtual and in-person sessions through July.

Pink Eagle Holdings is consolidating as a diversified Sri Lankan conglomerate, expanding globally across tea exports, logistics, food manufacturing, hospitality and digital retail. Milestones include Continental Tea/ADRA Ceylon's 10th anniversary, the Avanti freight app launch, and new food-manufacturing and retail initiatives.

SLCGE presented a proposal on 28 May 2026 to establish the SLCGE Design Hub, a centralized platform to showcase SME apparel manufacturers and connect them directly with international buyers to boost exports. The Industry and Entrepreneurship Development Deputy Minister responded positively to the proposal.