News & market updates

IMF Executive Board on Apr 1, 2026 reviewed the staff paper 'Understanding Global Imbalances', finding domestic macro policies are the main drivers of current‑account imbalances and that coordinated domestic rebalancing across countries is needed to reduce imbalances and support global growth.

Sri Lanka's rupee closed slightly weaker at 315.40/50 per USD on Monday, while government bond yields were broadly steady — e.g., 15.12.2026 at 8.30-8.40%, 15.03.2028 at 9.45-9.60% and 01.06.2033 around 10.95-11.05%.

CBSL data: new private sector borrowings rose 74.7% month-on-month to Rs.144.3 billion in February, and private sector credit stock was up 26.4% YoY to Rs.10.44 trillion at end-February. The Central Bank said interest rates are expected to ease and credit growth to continue, noting no spike in SME NPLs despite higher fuel costs.

HNB MD Damith Pallewatte defended 11% SME lending as reflecting higher funding costs and said HNB has disbursed Rs.1.024bn (102%) of its Rs.1bn MSME allocation. Commercial Bank (Rs.1.027bn, 103%) and NDB (Rs.400.286m, 100%) also met or exceeded their allocations amid wider sector criticism over concessional credit rollout.

Bond yields rose across the curve as Middle East tensions and oil-price swings pushed yields higher; the 91-day T-bill yield increased 16 bp to 7.80%. Foreign holdings of rupee government securities fell by Rs.4.98 billion (fifth consecutive weekly outflow) and USD/LKR closed near Rs.315.35/315.40.

Sri Lanka's rupee was quoted at 315.35/55 to the US dollar and bond yields were broadly steady (e.g. 15.03.2028 at 9.45–9.55%, 2033 around 11.00–11.10%). The All Share Price Index rose 0.25% to 21,170.69.

Sri Lanka added 10,113 active credit cards in January 2026, bringing total active cards to 2,176,299, a 0.5% monthly increase, central bank data showed. The rise is attributed to the economic recovery, falling interest rates and strong bank promotions with retailers.

Global oil prices jumped—Brent rose 7.78% to $109.03/bbl and U.S. crude surged 11.41% to $111.54—after U.S. President Donald Trump warned of intensified action against Iran. Equities traded mixed amid volatile flows, bond yields climbed on higher rate expectations and gold fell as the dollar strengthened.

Sri Lanka sold Rs200 million of on-tap Treasury bills at average yields of 8.09% (6-month) and 8.41% (12-month), bringing last week's total bills sold to Rs32,698 million amid market subscriptions of Rs107,855 million.

Foreign investors sold US$44.1 million (Rs13,658 million) of Sri Lanka rupee government bonds in the two weeks to March 31, reducing net foreign holdings to Rs2,251 million in the first 14 weeks of 2026, the Central Bank said.

Major central banks largely held interest rates in March as the Middle East conflict and volatile oil prices raised inflation risks and constrained room for policy easing. Developed markets saw 8 of 9 meetings unchanged (Australia hiked 25bp), while emerging markets were mixed, including several cuts and Colombia's 100bp hike.

Sri Lanka's rupee closed stronger at 315.30/40 to the US dollar (from 315.60/80), while government bond yields were broadly steady; key maturities ranged roughly from 8.90% to 11.00%, with small declines on the 01.05.2028 and 01.06.2033 papers.

Central Bank of Sri Lanka expects interest rates to ease and says private sector credit rose 26.3% YoY to Rs.10.3 trillion by January with the OPR held at 7.75%. New private sector borrowing fell to Rs.82.6 billion in January, the lowest in 11 months.

Average Weighted Prime Lending Rate fell from 24.82% in Jan 2023 to 8.88% by end‑Jan 2026 (edged to 9.28% by the week ending 27 Mar), while credit card rates remain around 26–28%, close to the CBSL's 28% cap. The divergence indicates limited pass‑through of easing monetary policy to unsecured consumer credit.

The IEA, IMF and World Bank have formed a coordination group to align analysis and mobilize support for countries hit by the Middle East war's energy and economic shocks, prioritizing low-income energy importers and assessing energy prices, trade flows, inflation and financing needs. The group may provide targeted policy advice, concessional financing and risk-mitigation tools.

Commercial Bank of Ceylon will expand its investment banking platform to offer integrated equity, debt and advisory services and use its balance sheet to underwrite and finance transactions, citing a 2025 green bond and research-driven advisory to support capital formation in Sri Lanka.

Sri Lanka's rupee strengthened to 315.20/60 per USD on Thursday and bond yields were broadly steady (15.09.2029 quoted at 9.90–10.00%; 01.03.2030 at 10.00–10.05%; 01.06.2033 around 11.00%). The ASPI rose 0.65% to 21,203.19 while the S&P SL20 slipped 0.04% to 5,901.80.

Gold fell about 1.3% to $4,694.48/oz after President Trump said the U.S. would continue the war in Iran, reversing a four-day rally; U.S. gold futures slid 1.9% to $4,723.70. Brent oil rose more than 4% and U.S. Treasury yields and the dollar advanced, weighing on bullion.

CFA Society Sri Lanka and Frontier Research will host an evening discussion, “Resilience on the line: Evaluating Sri Lanka’s macro stability amid global shocks,” on 9 April 2026 (5–7 p.m.) at Courtyard by Marriott, Colombo City Centre. Speakers will cover risks including oil price shocks, shipping disruptions, weaker global growth and tighter financial conditions.

Headline inflation (CCPI) accelerated to 2.2% year-on-year in March 2026, up from 1.6% in February, the Central Bank said. Core inflation rose to 2.5% and the CBSL projects inflation will reach the 5% target in Q2-2026.

Sri Lanka sold 32.49 billion rupees of 90 billion offered at the Treasury bill auction as yields rose across maturities. The 3M yield climbed 16bp to 7.80% (10.08bn sold of 40bn offered), the 6M rose 14bp to 8.09% (16.23bn sold of 30bn), and the 12M was 8.41% (+9bp, 6.17bn sold of 20bn).

Sri Lanka's rupee closed at 315.60/80 per US$ (unchanged) while local government bond yields were mostly higher — the 15.09.2027 bond rose to 8.90/9.10% from 8.75/9.00%. Other maturities were mixed, with some flat and some rising.

Colombo CCPI headline inflation rose to 2.2% Y-o-Y in March 2026 (from 1.6% in Feb) with month-on-month growth of 0.25% driven by non-food/transport; core inflation eased up to 2.5%. The Central Bank projects inflation will reach the 5% target in Q2-2026 and remain around target thereafter.

Sri Lanka's inflation was 2.2% in March 2026; the monthly Colombo CPI rose 0.5% to 195.8 points, driven by a 0.27% decrease in food and a 0.52% increase in non-food items.

An IMF team led by Sri Lanka Mission Chief Evan Papageorgiou is in Sri Lanka for combined 5th and 6th EFF reviews that could release about $700 million if completed. The mission will meet the President, ministers, the CBSL and banking officials and assess program pillars through March 2027.

Secondary bond yields edged higher across maturities (e.g., 01.05.28 at 9.65%, 01.03.30 ~9.99–10.00%, 01.10.32 at 10.70%) as selling pressure and external risks rose; Brent crude topped $115. A Rs.90 billion weekly T-Bill auction (40bn 91-day, 30bn 182-day, 20bn 364-day) is scheduled and USD/LKR closed near 315.10/316.00.

The war in the Middle East is driving higher energy prices and major supply‑chain disruptions, which are boosting inflation and tightening global financial conditions. Energy importers, food and fertilizer‑dependent agriculture, tourism, manufacturing and banks face the greatest strain.

Sri Lanka's rupee weakened to 316.00/50 per US dollar from 315.60/80, while government bond yields were broadly steady (e.g. the 15.12.2029 bond quoted at 9.97/10.02%). 90,000 million rupees of Treasury bills are being issued at auction today.

National Development Bank PLC (NDB.N0000) was named Sri Lanka’s Best Trade Finance Bank and secured the #1 domestic ranking at the Euromoney Awards for Excellence 2026. The client-voted accolade highlights NDB's trade finance, treasury and digital capabilities supporting exporters.

Seylan Bank PLC signed an MOU with GS EVO Motors to provide a dedicated EV leasing facility offering interest rates from 10% (A.I.R) and repayment terms up to seven years. The facility includes fast-track 24-hour approvals, island-wide access and a dedicated leasing team.