News & market updates

The war in the Middle East has raised global financial-stability risks, lifting energy prices and inflation expectations and pushing up sovereign yields and financial conditions. Markets have so far adjusted orderly, but vulnerabilities in nonbank credit, leverage, and high public debt amplify downside risks.

Sri Lanka's rupee was quoted at 315.50/75 to the US dollar and bond yields opened broadly steady; government bond yields ranged about 9.90–10.75% and a 90,000 million rupee Treasury bill auction was underway.

Foreign investors sold US$2.25mn (Rs 697m) of Sri Lanka government securities in the week ended April 10, central bank data showed. This was the 11th week of net sales in the past 30 weeks and leaves foreign investment into rupee bonds at Rs 1,554m in the first 15 weeks of the year.

IMF warned the war on Iran raises global recession risk, cutting global growth to 3.1% in 2026 and lifting 2026 inflation to 4.4%, and presented adverse/severe scenarios with growth as low as 2% and inflation above 6% if energy disruptions persist.

Sri Lanka worker remittances rose 17.5% to US$814.8 million in March 2026. Inflows were up 26.5% to US$2,294.9m in Jan–Mar and follow record 2025 remittances of US$8,076.2m, with central bank policy and a shift back to formal channels cited as drivers.

Sri Lanka's rupee closed at 315.50/60 per US dollar, little changed from 315.55/65 the previous day. Government bond yields were mostly steady — e.g., the 15.12.2026 bond at about 8.40–8.60% and longer-dated maturities around 8.90–11.18%.

Sri Lanka's public debt office said there were no subscriptions under the Direct Issuance Window for Treasury bond LKB00530G018 (issue offered Rs100bn) at the weighted average yield of 10.12%. Separately, the office raised Rs82.09bn in 3-, 6- and 12-month Treasury bills.

ADB forecasts Sri Lanka's GDP to moderate to 4.0% in 2026 and 4.2% in 2027, with inflation set to rise to 5.2% largely due to the Middle East conflict. The economy remained resilient in 2025 with strong private consumption, record remittances, a primary surplus and higher reserves, but higher energy costs and weaker tourism/trade pose risks.

Sri Lanka's rupee was quoted flat at 315.55/65 per USD in the spot market. Bond yields opened broadly steady (2029-2034 maturities around 9.90%-11.25%) and the ASPI rose 0.94% while the S&P SL20 gained 1.16%.

Sri Lanka sold Rs5,000 million of Treasury bills on tap at average rates of 7.94% (3-month), 8.14% (6-month) and 8.45% (12-month), bringing total bills sold last week to Rs35 billion; settlement is 10 April 2026.

The ADB forecasts growth in developing Asia and the Pacific will slow to 5.1% in 2026 and 2027 (from 5.4% in 2025), citing the Middle East conflict and trade uncertainty; regional inflation is seen rising to 3.6% in 2026. The report warns of risks from higher energy and food prices, shipping disruptions and tighter financial conditions.

The Treasury raised Rs.82.09 billion of Rs.100.00 billion offered in a bond auction, with the 01.07.30 (2030) tenor issued at 10.12%, the 15.06.34 (2034) at 11.16% and the 01.07.37 (2037) at 11.19%. Money-market liquidity surplus was Rs.239.96 billion and USD/LKR closed at 315.60/315.90.

Global equities rebounded after Israel signalled it would begin talks with Lebanon, easing regional tensions; US crude retreated from highs to $97.71/bbl and Brent to $95.50/bbl. Treasury yields fell, the dollar weakened and gold rose 1.63% to $4,793.07/oz.

Deloitte Sri Lanka launched the Non-Bank Financial Institutions Sector Compensation & Benefits Survey 2025, providing pay benchmarks and workforce insights for NBFIs. The report notes sector stabilisation after recent pressures, a shift from rate-driven performance to execution and talent priorities, and AI-driven impacts on HR and operations.

Sri Lanka sold Rs82.09bn of 2030, 2034 and 2037 government bonds after offering Rs100bn, with average yields of 10.12% (2030), 11.16% (2034) and 11.19% (2037).

Sri Lanka's rupee weakened to 315.55/65 per US$ (from 315.30/40) and government bond yields generally rose, with the 15.12.2029 maturity at 10.00% and longer-dated yields higher (e.g., 01.10.2032 around 10.75–10.95%).

IMF staff and Sri Lankan authorities reached staff-level agreement on the combined Fifth and Sixth Reviews of the EFF, which, if approved by the IMF Executive Board, would unlock about US$700 million in financing. Approval is contingent on restoring cost‑recovery fuel and electricity pricing and completing financing assurances and debt restructuring.

Sri Lanka's rupee weakened to 315.42/48 per USD and government bond yields were quoted higher, for example the 01.06.2033 bond at 10.95/11.05% (up from 10.90/11.00%). The ASPI was down 0.71% at 21,761.50 while the S&P SL20 was up 0.81% at 6,041.32.

Secondary Sri Lankan bond yields initially fell after the US‑Iran ceasefire and a >15% drop in Brent crude, but profit‑taking and T‑bill auction results left two‑way quotes marginally lower. Weekly T‑bill yields rose for a third week (91-day 7.95%, 182-day 8.14%, 364-day 8.45%) and a Rs.100bn T‑bond auction is scheduled today.

Sri Lanka sold Rs30 billion of Treasury bills as yields rose across maturities: the 3-month yield climbed 15bp to 7.95% (all Rs10bn sold), the 6-month rose 5bp to 8.14% (Rs10bn sold) and the 12-month rose 4bp to 8.45% (Rs10bn sold). All three bills are available on tap.

Rupee closed slightly stronger at 315.30/40 per USD (from 315.40/50) while government bond yields fell across maturities — e.g. the 01.07.2028 bond declined to 9.50-9.60% from 9.70-9.80%.

Sri Lanka's rupee strengthened to 315.10/25 per USD and government bond yields fell sharply after a US-Iran ceasefire announcement (e.g., 01.07.2028 bond quoted at 9.30-9.50% from 9.70-9.80%). The ASPI rose 4.35% and a 30,000 million rupee T-bill auction was ongoing.

Secondary bond market was dull with trades on maturities at yields of 9.75%–11.00% ahead of a Treasury Bill auction offering Rs.30 billion (down Rs.60 billion). Last week’s T‑bill weighted averages rose to 7.80%, 8.09% and 8.41%; USD/LKR traded around 315.45.

Global equity markets traded cautiously as Brent crude held near $110/bbl amid heightened Middle East tensions and a US deadline, supporting the dollar and reducing expectations of Fed rate cuts this year.

Deloitte Sri Lanka launched its Non-Bank Financial Institutions Sector Compensation & Benefits Survey 2025, presenting pay benchmarks and workforce findings and highlighting trends including interest-rate normalisation, talent cost pressures, and rising demand for digital/AI skills in the NBFI sector.

Sri Lanka's rupee closed flat at 315.40/50 to the US dollar and government bond yields were broadly steady—short and long maturities around 8.35%–11.08%—and a 30,000 million rupee Treasury bill auction is scheduled on Wednesday.

President Anura Kumara Dissanayake said Sri Lanka is aiming to reach a staff-level IMF agreement by Thursday (09) that could unlock up to $700 million and allow simultaneous release of the fifth and sixth tranches potentially before the end of May. He said talks with the visiting IMF team are ongoing and "productive."

Secondary bond yields held broadly steady, with the 01.05.27 at 8.70% and mid/long-dated maturities around 11.00%–11.135%; secondary Treasury trading volume was Rs.11.89bn. Net liquidity surplus was Rs.231.84bn as the Central Bank drained Rs.50bn via overnight repo at 7.58% and deposited Rs.181.84bn at the SDFR of 7.25%; USD/LKR ~315.45 and Brent crude remained elevated.

Sri Lanka's rupee was quoted at 315.42/50 to the US dollar while local bond yields were broadly steady (e.g., the 15.03.2028 bond at 9.45/50%). On the Colombo Stock Exchange the All Share Price Index rose 0.32% to 21,194.40 and the S&P SL20 gained 0.22% to 5,874.09.

Siyapatha Finance will list 3.75 billion rupees of 11.50% subordinated unsecured debentures on April 7; the issue was rated 'BBB+(lka)' by Fitch and was offered at 100 rupees each.