News & market updates

Sri Lanka’s rupee weakened to 315.60/80 per US$ in the spot next market on Monday from 314.70/315.00 on Friday, while government bond yields rose — e.g. the 15.12.2029 bond at about 9.99–10.00% and the 01.06.2033 at about 11.00%.

Secondary bond market closed the week broadly unchanged across the belly to long end after choppy trading driven by the Middle East conflict and oil-price swings, while the very short end rose modestly. Weekly T-Bill yields increased (91d 7.64%, 182d 7.95%, 364d 8.32%), foreign holdings saw a net outflow of Rs.8.68bn and USD/LKR weakened to about 315.

Sri Lanka's rupee weakened to 314.75/315.25 against the US dollar and government bond yields opened slightly higher (2029 at 9.95/10.00%, 2030 ~10.00/10.03%, 2031 10.05/10.15%). The All Share Price Index was down 1.00% at 21,162.94.

Asian stocks slumped as Brent crude rose 3% to $115.98, bringing monthly gains near 60% and raising inflation and recession risks. Markets have priced in higher Fed tightening and sovereign yields have jumped, pressuring energy, manufacturing, logistics, retail and financial sectors.

Central Bank Governor Nandalal Weerasinghe said Sri Lanka’s recent low inflation and an 11-month period of deflation were beneficial, noting the economy still grew 5% and private credit turned positive from June 2023 after surrender-rule easing and rupee appreciation.

Bank of Ceylon launched the BOC Agri Banking Unit to provide specialised financing, concessionary loans and an 'Agri-Power' fixed deposit scheme to mobilise funds for crop, livestock, fisheries, horticulture and agri-tech projects, and to support export-oriented agribusiness.

Pan Asia Bank ran financial-literacy programs reaching over 1,000 women and launched a 13-month Women’s Fixed Deposit offering 9.5% interest exclusively for Adaraneeya AE account holders.

The Court of Appeal upheld the Central Bank's refusal to disclose transaction-level EPF investment data, setting aside the RTI Commission's order and finding the information exempt as commercially sensitive under Section 5(1)(d) of the RTI Act. The court said disclosure could harm the EPF's competitive position in government securities auctions and reduce returns for contributors.

Sri Lanka's rupee weakened to 314.70/315.00 against the US dollar on Friday, while government bond yields were broadly steady, with key maturities trading around 9.25% (15.12.2026) to 10.75% (01.06.2033).

The Court of Appeal ruled for the Central Bank and set aside the RTI Commission's order requiring disclosure of transaction-level EPF investment data. The court held the details are commercially sensitive and could harm the EPF by revealing its investment strategy and reducing returns.

Sri Lanka's public debt management office said there were no subscriptions for Treasury bills offered on tap in phase II at average rates of 7.64%, 7.95% and 8.32%. The office earlier raised 34,941 million rupees of 3-, 6- and 12-month bills from an 80 billion-rupee offering.

Secondary Treasury bond yields rose, with mid-to-long maturities trading around 9.55%–11.00% and total secondary volume at Rs.37.60bn. Net liquidity surplus was Rs.247.29bn as the CB drained Rs.100bn via overnight repo; USD/LKR closed 314.30/314.70 and Brent rebounded above $104/bbl.

Sri Lanka's rupee weakened to 314.50/80 per US dollar, while government bond yields edged lower (e.g. the 15.06.2029 quoted near 9.70–9.80%). The Colombo ASPI fell 0.78% to 21,586.56 and the S&P SL20 was down 0.45% at 6,062.83.

Fitch says an adverse Iran conflict through mid-2026 would reduce global real GDP by about 0.8% after four quarters versus its March baseline, driven mainly by higher oil prices and falling equity markets; inflation across the 'Fitch 20' would be ~1.3pp higher after four quarters.

Sri Lanka's rupee weakened to 314.30/70 per US dollar and local government bond yields rose across maturities; the 15.02.2028 bond closed at 9.45–9.55% and the 01.06.2033 bond at 10.85–10.95%.

Gold held steady at $4,503.29/oz as investors awaited clearer signs on Middle East ceasefire talks; crude oil rose above $100/bbl and markets have priced out Fed easing this year.

Sri Lanka's rupee weakened to 313.90/314.25 per USD and bond yields opened higher (e.g. 15.09.2029 at 9.75/85% and 01.06.2033 at 10.90/11.00%); the ASPI fell 1.32% to 21,580.25.

Asian stocks struggled as Middle East ceasefire talks and widening conflict sent Brent crude to $103.35/bbl, stoking a surge in oil prices. The move lifted the dollar, pushed out expectations of Fed rate cuts and left MSCI Asia ex-Japan lower amid heightened market caution.

Central Bank Governor Nandalal Weerasinghe said imposing forex or trade controls is not the right response to Middle East conflict fallout, with the central bank keeping interest rates on hold and the government raising fuel prices to balance external and domestic demand. He added remittances remain strong, tourism is down, and the CB is using repo operations to mop up excess liquidity while warning that permanent sterilization is needed to avoid excess imports and pressure on the rupee.

Opposition Leader Sajith Premadasa called for immediate suspension of the parate law and a targeted relief package to save MSMEs, warning rising fuel prices and higher borrowing costs threaten about 4.5 million MSME entrepreneurs who contribute around 52% of the economy. He urged structured debt restructuring and direct Treasury support for affected businesses.

The Central Bank of Sri Lanka held the policy rate at 7.75% and said gross official reserves stand at $7.3bn, providing buffers against external shocks. It projects headline inflation around 2% in March and expects inflation to converge to the 5% target by Q2 2026, while warning risks from Middle East energy volatility could change the outlook.

The Central Bank held the OPR at 7.75% in its 2nd MPC review for 2026, leaving SDFR/SLFR and reserve requirements unchanged. Weekly T‑bill yields rose (91d 7.64%, 182d 7.95%, 364d 8.32%) in an undersubscribed auction; secondary bond market volatile and the rupee firmed slightly to ~Rs.313.8/314.5 with gross official reserves at $7.3bn.

Siyapatha Finance, a subsidiary of Sampath Bank (SAMP.N0000), had its Rs. 3.75 billion subordinated debenture issue oversubscribed. The five-year listed debentures carry a fixed 11.50% p.a. and proceeds will strengthen Tier-2 capital and fund the lending portfolio.

Mahindra Ideal Finance Ltd's debut LKR 1,000 million Tier-2 debenture issue was oversubscribed on day one. The five-year issue (maturing 2031) includes Type A fixed 12.00% and Type B floating (364-day T-bill + 3.50%) tranches, with proceeds to expand lending and strengthen Tier-2 capital.

People’s Bank launched the 'PrimeScore Privilege Loan', offering salaried individuals loans up to Rs.10 million at interest rates from 10% p.a. with no guarantor required. The facility is for borrowers with A1–A3 credit grades and includes quick processing and an online application option.

Mahindra Ideal Finance's Rs. 1 billion debut debenture issue was oversubscribed on day one. The five-year Tier 2 offering maturing in 2031 includes Type A fixed at 12.00% and Type B at 364‑day T‑bill + 3.50%, with proceeds to boost lending capacity and Tier 2 capital.

Sri Lanka's Central Bank said it will stick to a flexible exchange rate, intervening only to manage excess day-to-day FX volatility, and has bought about US$700 million in the first two months to bolster reserves.

Central Bank Governor Nandalal Weerasinghe warned IMF programme conditions may change significantly at the upcoming fifth/sixth reviews as IMF staff visit Colombo Mar 26–Apr 9, citing Cyclone Ditwah and a >35% jump in energy prices that raised reconstruction costs and inflationary pressure. Completion of the combined reviews would unlock about US$700m in IMF tranches.

Sri Lanka sold 39.94 billion rupees of an offered 80 billion rupees at Wednesday's Treasury bill auction while yields rose across maturities (3M 7.64%, 6M 7.95%, 12M 8.32%). Sales by maturity: 3M sold 14.88bn of 20bn offered; 6M sold 7.39bn of 25bn; 12M sold 12.65bn of 35bn.

Sri Lanka's rupee weakened, closing at 313.80/314.50 to the US dollar, while government bond yields were broadly steady (e.g., 15.02.2028 at 9.35/65%). Some longer-dated yields edged down — 15.12.2029 to 9.80/95% and 01.06.2033 to 10.80/90%.