News & market updates

Foreign holdings of rupee government securities rose by Rs. 6.63 billion to Rs. 146.56 billion in the week ending 29 Jan; interbank liquidity surged to Rs. 233.13 billion, driving money-market rates and bond yields lower and the rupee to about Rs. 309.25. January CCPI inflation was 2.3% and recent T-bill/bond auctions were well-subscribed.

Sri Lanka's vehicle imports reached USD 2.047 billion in 2025, with December imports of USD 301 million and personal vehicles costing USD 1.6 billion, the Central Bank reported.

The Public Debt Management Office raised Rs.179.06 billion (87.35% of Rs.205bn) at a three‑maturity bond auction, with WAYRs of 9.72% (01.03.30), 10.92% (15.06.34) and 11.08% (01.07.37). Secondary yields fell, trading was robust (Rs.60.69bn) and USD/LKR closed near Rs.309.4.

The SEC and Colombo Stock Exchange held an 'Invest Sri Lanka' forum in Riyadh on 24 January to showcase Sri Lanka's capital market and attract Saudi investors; a high-level delegation including the Central Bank Governor, SEC Chairman and CSE CEO took part.

CBSL Governor Nandalal Weerasinghe said IMF staff are assessing Cyclone Ditwah's economic impact and the postponed fifth review of the IMF Extended Fund Facility may be revised. He noted Sri Lanka received $206m under the IMF RFI, expects ratings upgrades to boost foreign investment, and sees only a short-term growth hit with recovery in 2026.

Central Bank of Sri Lanka kept the Overnight Policy Rate at 7.75%. Inflation was 2.1% in Dec 2025 and is projected to move toward 5% by H2 2026 amid rising food and core inflation, strong credit growth and post-cyclone rebuilding; gross official reserves were $6.8bn at end-2025.

Central Bank kept the Overnight Policy Rate at 7.75% and the weekly Rs.125 billion T-bill auction was fully subscribed with yields falling (91d 7.84%, 182d 8.26%, 364d 8.36%). Net money-market liquidity surged to Rs.211.53 billion and short-end bond yields dropped ahead of a Rs.205 billion Treasury bond auction on 29 Jan.

John Keells Holdings (JKH) reported 3Q EBITDA of Rs. 23.76 billion, up 68%, and declared a second interim dividend of Rs. 0.10 (Rs. 1.77 billion outlay). Group revenue rose 54% to Rs. 125.05 billion and PBT increased 113% to Rs. 12.89 billion.

John Keells Holdings reported Group EBITDA up 68% year-on-year to Rs.23.76 billion in Q3. Nine-month EBITDA rose 84% to Rs.55.10 billion, profit attributable was Rs.6.48 billion, City of Dreams and the Colombo West terminal are ramping up, and a second interim dividend of Rs.0.10/share was declared.

IMF says Sri Lanka’s EFF program is not on hold; only the fifth review has been postponed to reassess economic conditions after the recent cyclone, and the IMF mission is expected to return in the coming weeks to discuss any target adjustments.

Sri Lanka signed a bilateral debt-restructuring agreement with CREDENDO (Belgium) to reschedule about €9.6 million of external debt. The agreement is intended to advance the external debt restructuring process and help restore debt sustainability.

President Anura Kumara Dissanayake and an IMF delegation agreed to continue the Extended Fund Facility (EFF) programme without changes; discussions on the release of the sixth tranche will resume in March. The government also presented a Rs. 500 billion supplementary estimate for rural relief and infrastructure restoration.

Central Bank's Monetary Policy Review is due today at 07:30 and is widely expected to hold the Overnight Policy Rate at 7.75%. A Rs.125bn weekly Treasury Bill auction (91/182/364-day) is scheduled below maturities (~Rs.132.82bn); secondary bond trades were light and USD/LKR closed near 309.7.

The Treasury announced a Rs.205 billion bond auction for 29 Jan across three maturities (Rs.60bn 1-Mar-2030 at 9.50% coupon; Rs.80bn 1-Jun-2034 and Rs.65bn 1-Jul-2037 at 10.75%). Secondary yields edged up marginally, the rupee strengthened to ~Rs.309.55, and net liquidity surplus was Rs.169.74bn.

First Capital Holdings (CFVF.N0000) hosted its 12th Investor Symposium and presented a 2026 outlook forecasting Sri Lanka GDP to soften to 3.0–4.0% (from 5.0% in 2025). The presentation flagged Cyclone Ditwah-driven spending weakness, higher post-storm capital expenditure needs and renewed debt-management risks, alongside discussion on rates, FX and bond markets.

Secondary bond market rallied with a parallel downward shift in the yield curve as system liquidity exceeded Rs. 200 billion. Weekly T‑bill weighted average yields fell (91d 7.93%, 182d 8.36%, 364d 8.47%), total accepted T‑bill Rs.137.5bn, foreign GS holdings down Rs.550m; USD/LKR ~309.76/309.80.

Opposition Leader Sajith Premadasa met MSME stakeholders who raised cash-flow constraints, high taxation, rising costs, currency volatility and regulatory bottlenecks. He said he will take the concerns to the Committee on Public Finance and engage the Finance Ministry seeking practical solutions.

Secondary Treasury bond yields fell on 21 Jan 2026 with robust activity and Rs.81.83 billion transacted in the secondary market (e.g. 01.05.28 ~9.11%-9.12%; 15.06.35 ~11.03%-11.06%). Net liquidity surplus decreased to Rs.157.54 billion with Rs.157.57 billion at the CB SDFR (7.25%), and USD/LKR closed at 309.75/309.85.

Grid Connected Solar Power Association says CEB's nine-month weekend/public-holiday curtailment of large renewable plants has caused about Rs.2 billion in losses and cut monthly incomes of ground-mounted solar owners by ~15%. The group urges immediate BESS implementation, compensation and continuation of the FIT, warning that draft National Electricity Policy proposals (no-compensation curtailment, rupee PPAs, competitive bidding) and delayed guidelines threaten the local renewable sector and co

Sri Lanka rupee closed at 309.75/85 to the US dollar, slightly weaker than the prior day; government bond yields were mixed-to-lower — the 15.12.2026 bond fell to 8.35/45% (from 8.40/50%), the 15.03.2028 bond rose to 9.08/12%, and longer-dated yields ranged around 9.60–11.00%.

Rupee quoted at 309.70/85 to the US dollar, slightly weaker than the prior day, while Sri Lankan government bond yields eased on shorter tenors (e.g., 15.12.2029 at 9.60/65% and 15.03.2031 at 9.90/10.00%).

Weekly Treasury Bill auction saw weighted average yields decline — 91-day 7.93% (-2bp), 182-day 8.36% (-8bp), 364-day 8.47% (-1bp); the PDMA raised Rs.112.48bn (89.99% of Rs.125bn) with bids 2.81x. Secondary bond yields consolidated, net liquidity was Rs.189.06bn and USD/LKR closed near 309.75.

ASPI closed at an all-time high of 23,806.32, up 0.77% (182.58 pts) on turnover above Rs.9.8bn. Gains were led by Hayleys, Colombo Dockyard and Sampath Bank, with the capital goods and banking sectors among the top contributors.

Sri Lanka solar producers say curtailment of renewable generation has expanded from weekends to weekdays in 2026, cutting around Rs 2 billion (about 15% of revenues) and leaving many unable to service loans. Firms seek compensation or a battery tariff while delays in BESS policy and rupee depreciation worsen finances.

Sri Lanka's rupee closed at 309.72/80 to the US dollar, slightly weaker than 309.65/70 the previous day, while government bond yields were broadly steady (e.g., 15.12.2026 ~8.40–8.50%, 15.03.2028 ~9.03–9.08%).

IMF Managing Director Kristalina Georgieva reaffirmed support for Sri Lanka in a meeting with Prime Minister Dr. Harini Amarasuriya in Davos. Labour Minister and Deputy Finance Minister Dr. Anil Jayantha Fernando also took part in the discussion.

Sri Lanka's rupee traded slightly stronger at 309.60/65 per US$ while government bond yields were broadly steady (e.g., 15.10.2029 quoted at 9.60/65%). The ASPI rose 0.23% to 23,678 and an auction of 125,000 million rupees in Treasury was ongoing.

Sri Lanka's central bank will present a report to Parliament showing inflation below 2% in Q1–Q2 2025 (with -1.1% in Q2 and 0.8% in Q3), missing its 5% floor. The achievement has drawn praise but also concerns about the central bank's exchange-rate and operating framework.

Standard Chartered says Sri Lanka's sovereign ratings outlook is likely to shift from Stable to Positive as debt-to-GDP falls below 100% by 2027. It expects external debt service under $3bn in 2026, reserves around $7.5bn by end-2026 and policy rates to stay on hold.

Sri Lanka earned Rs904bn from vehicle imports in 2025, above the Rs441bn originally expected, Deputy Economic Development Minister Nishantha Jayaweera said. The report ties the receipts and higher imports to central bank policy decisions and exchange-rate moves, noting depreciation from 290 to 310 LKR/USD.