News & market updates

Commercial Bank of Ceylon (COMB.N0000) will open a full-service branch in Port City Colombo offering digital banking, trade, foreign-currency, corporate and retail services to support cross-border transactions and international investors.

Sri Lanka's rupee spot closed at 329.00/331.00 to the US dollar on Friday, recovering from 342.00/350.00 the previous day, while government bond yields fell across multiple maturities.

Sri Lanka's Board of Investment pitched a pipeline of 30 project-ready opportunities to Vietnamese investors as the economy rebounds — GDP grew 5.0% in 2024 and 2025 and FDI rose to US$1.063bn in 2025. Projects span manufacturing, logistics and port services, tourism, pharma, and mixed infrastructure developments.

Government expects to receive a $700m IMF EFF tranche on 27 May. It reiterated commitment to fiscal reforms, aims to meet its 2032 debt-to-GDP target by end-2026, and said multilateral inflows, exports and remittances will strengthen the foreign exchange position.

The Central Bank met bankers and currency dealers as the rupee weakened—TT LKR/USD at Rs.342.63/354.03 and interbank trading around Rs.331–348—and authorities are considering tighter FX rules and a possible 50–100bp policy rate hike to curb volatility.

UNP says the Sri Lankan rupee has depreciated from Rs.292 to Rs.354 in the 20 months since the current government took office, blaming a failure to continue the previous economic programme and external pressures including the Middle East war, higher shipping costs and a stronger US dollar. The party warned exporters may gain while workers and the public face higher living costs, noting the apparel sector views depreciation positively.

Kelly Felder opened its first international flagship store at The Glen in Melbourne on 15 May 2026, becoming the first Sri Lankan fashion brand to establish a retail presence in the Western market.

Union Bank and the Sri Lanka Export Credit Insurance Corporation (SLECIC) formalised an APARA guarantee allowing Union Bank to offer pre-departure loans to migrant workers backed by credit insurance. The guarantee reduces lending risk for banks and expands financial access for prospective overseas workers.

EDB launched an awareness and hands-on training programme on 19 May 2026 to boost Sri Lanka's light engineering exports, aiming to raise revenue from $205m in 2025 to $400m by 2030. The joint initiative with FDSI and the Government Factory covered export strategy, foundry skills, sustainability and quality assurance.

IMF mission chief Evan Papageorgiou urged Sri Lanka to continue allowing the economy to adjust as the rupee has depreciated sharply ahead of IMF Board approval of the fifth and sixth EFF reviews next week (May 27). He noted authorities have made progress restoring macro stability, rebuilding reserves and strengthening confidence.

Hellmann Worldwide Logistics and MAS Holdings will develop an 8,000+ sqm built-to-suit fashion logistics hub in Kimbulapitiya, six km from Bandaranaike Airport, to serve as Hellmann’s South Asia fashion hub. The facility features dual-zone humidity/climate control, solar panels and scalable regional distribution capabilities.

The Joint Apparel Association Forum (JAAF) said the Sri Lankan rupee's 4.8% depreciation against the US dollar reflects wider global pressures (Middle East conflict, higher fuel and shipping costs) rather than domestic weakness, and that a weaker rupee can boost apparel export competitiveness.

Sri Lanka's tea exports fell 4% YoY to 78.3 Mn/Kg in Jan-Apr 2026, with export earnings down 5.64% to $451m and April volumes down 1.6% to 17.9 Mn/Kg. Analysts attribute the decline and a drop in FOB to $5.76/kg to shipping disruptions after the US–Iran escalation that hit Middle East routes.

CBSL Governor Nandalal Weerasinghe defended Sri Lanka’s flexible exchange rate at a Committee on Public Finance hearing, saying rupee depreciation does not change external debt in dollar terms and that exchange-rate flexibility aids reserve rebuilding and competitiveness. He urged strengthening dollar earnings via exports and remittances and stressed the CBSL's mandate on price and financial stability.

Sri Lankan rupee depreciated further, with the US dollar selling rate rising to Rs. 354.03 (buying Rs. 342.63), surpassing Rs. 350 for the first time since March 2023. The currency has come under pressure amid global and domestic factors, including uncertainty linked to the ongoing Middle East conflict.

Sri Lanka's rupee has fallen 4.6% this month and slid to 334.52 per dollar, which officials attribute to speculation, a six-fold surge in the fuel import bill, and outflows from government securities and the stock market.

Sri Lanka's tea exports fell 17.3% YoY in March to $114.75m as the Middle East conflict disrupts shipments; Dilmah (CTEA.N0000), which derives about 30% of sales from the Middle East, reports logistics and fuel-cost pressures and is shifting into new markets.

JAAF said the Sri Lankan rupee's recent 4.8% depreciation reflects global pressures (Middle East conflict, higher fuel and shipping costs) rather than domestic weakness, and that a managed weaker rupee can boost apparel export competitiveness, jobs and FX earnings.

Rupee weakened, closing at Rs. 326.92 per USD (previously Rs. 325.62) with spot trades ranging Rs. 327.85–328.90 as depreciation continued. Officials cited global uncertainty, Middle East tensions, higher oil prices, importer demand and delayed export conversion; Central Bank says it follows a flexible exchange rate.

Economist Ganeshan Wignaraja said Sri Lanka should plan for an 18th IMF programme as the current programme ends in mid-2027 and large debt repayments fall due from 2028. He warned Cyclone Ditwah and the Middle East war have raised oil prices, hit remittances and tourism, and pushed the economy toward a slower-growth, higher-inflation scenario.

Talawakelle Tea Estates Plc has secured EU, USDA NOP and JAS organic certification for its Great Western and Logie teas, enabling it to market certified organic teas internationally. The company has dedicated organic fields, a Logie factory for organic production and an end-to-end management system to ensure compliance.

The Export Development Board launched an awareness and hands-on training programme for exporters and potential exporters in the light engineering sector on 19 May 2026, aiming to boost competitiveness as exports stood at USD 205 million in 2025 with a target of USD 400 million by 2030. The programme covered export/business topics and technical foundry training, including simulation, energy efficiency, quality assurance and pollution control.

Centre for a Smart Future warned the government that Sri Lanka's trade, export and FDI reform agenda lacks ambition and urgency, risking greater economic pain as global conditions worsen. It urged rapid implementation of the Export Development Plan, a coherent FDI strategy and operationalising the Economic Commission.

Government announced an additional Rs. 2.5 billion fertiliser subsidy for tea smallholders and growers as emergency relief amid Gulf-related cost pressures and adverse weather. Tea export earnings fell 5.22% YoY to $351.58m in 1Q 2026, with production and volumes also down.

The India–Sri Lanka Business Forum in Mumbai on 13 May 2026 highlighted renewed momentum in trade, investment and connectivity across tourism, renewable energy, ICT, logistics and infrastructure, with John Keells chair Krishan Balendra among delegates promoting deeper private‑sector ties.

The Ceylon Chamber of Commerce will host the Sri Lanka Climate Summit 2026 on 9 June 2026 at Taj Samudra, shifting focus to implementation, technical readiness and climate-linked finance. Platinum sponsors include Commercial Bank and Dilmah Tea; strategic sponsors include Nestlé Lanka, Cargills and Colombo Stock Exchange.

Sri Lanka's manufacturing PMI fell to 42.6 in April from 66.7 in March, signaling a contraction. CBSL said declines in new orders, production and employment were driven by fading festive demand, fewer working days and seasonal layoffs, while suppliers' delivery times lengthened due to holiday disruptions and West Asia conflict.

Dipped Products PLC inaugurated a Rs. 2.3 billion expansion at its Kottawa facility, adding two advanced glove dipping plants, an ETP and a high-efficiency steam boiler with robotic automation to boost high-value glove exports. Parent Hayleys PLC is positioned to benefit from higher export volumes and FX inflows.

The Ministry of Energy and BOI issued a Request for Information (23 Apr 2026) inviting investors for green hydrogen and green ammonia projects, targeting $1bn annual export revenue by 2030 and 70% renewable electricity by 2030. The non-binding RFI window closes on 5 June 2026.

Sri Lanka is likely to record a small current account deficit in 2026, the Central Bank said, as higher global crude prices push oil import bills above inflows. The country had posted surpluses from 2023–25 supported by tourism receipts and remittances.